No. 2009-1557
United States Court of Appeals for the Federal Circuit
________________
HAEMONETICS CORP.,
Plaintiff-Appellee,
v.
BAXTER HEALTHCARE CORP. and FENWAL INC.,
Defendants-Appellants.
Appeal From The United States District Court For The District of Massachusetts
In Case No. 05-CV-12572, Judge Nathaniel M. Gorton
BRIEF OF DEFENDANTS-APPELLANTS
JOHN J. NORMILE JONES DAY 222 East 41st Street New York, NY 10017 (212) 326-3939
GREGORY A. CASTANIAS LUKE A. SOBOTA PAUL R. GUGLIUZZA JONES DAY 51 Louisiana Avenue, N.W. Washington, D.C. 20001 (202) 879-3939
Attorneys for Defendants-Appellants
i
CERTIFICATE OF INTEREST
Counsel for defendants-appellants hereby certifies the following:
1. The full name of every party represented by me is:
Baxter Healthcare Corp.; Fenwal, Inc.
2. The name of the real party in interest (if the party named in the caption is not the real party in interest) represented by me is:
The real parties in interest are named in the caption. 3. All parent corporations and any publicly held companies that own 10 percent of more of the stock of the party or amicus curiae represented by me are:
Baxter Healthcare Corp. is a wholly owned subsidiary of Baxter International Inc.
Fenwal, Inc. is a wholly owned subsidiary of Fenwal Holdings, Inc. 4. The name of all law firms and the partners or associates that appeared for the party or amicus now represented by me in the trial court or agency or are appearing in this Court are:
Jones Day: John J. Normile; Gregory A. Castanias; Luke A. Sobota; Paul R. Gugliuzza
Skadden Arps Slate Meagher & Flom LLP: Daniel A. DeVito; Douglas R. Nemec; Edward V. Filardi; James L. Leonard, Jr.; Justin J. Daniels; P. Anthony Sammi; Rachel Blitzer; Stacey Cohen; Thomas J. Dougherty
For Baxter only: Sidley Austin LLP: David T. Pritikin; Jon M. Spanbauer; Marlee Jansen; Scott B. Familant; William H. Baumgartner
For Baxter only: Foley Hoag LLP: Donald R. Ware; Nathan C. Henderson
For Fenwal only: Nutter McClennen & Fish LLP: Daniel J. Gleason; Timothy D. Johnston; Heather B. Repicky
ii
TABLE OF CONTENTS
Page
CERTIFICATE OF INTEREST.................................................................................i
TABLE OF AUTHORITIES .....................................................................................v
TABLE OF ABBREVIATIONS ..............................................................................ix
STATEMENT OF RELATED CASES....................................................................xi
JURISDICTIONAL STATEMENT ..........................................................................1
STATEMENT OF ISSUES .......................................................................................1
STATEMENT OF THE CASE..................................................................................2
A. Preliminary Statement ...........................................................................2
B. Procedural History.................................................................................4
STATEMENT OF FACTS ........................................................................................5
A. Blood and Blood Donation....................................................................5
B. Centrifugation, the ’983 Patent, and the Prior Art ................................7
C. Prosecution History of the ’983 Patent ...............................................12
D. The ’983 Patent as Issued....................................................................13
E. Development of the ALYX® System ..................................................14
F. The ALYX® System............................................................................16
SUMMARY OF ARGUMENT ...............................................................................17
STANDARDS OF REVIEW...................................................................................20
ARGUMENT ...........................................................................................................21
I. CLAIM 16 OF THE ’983 PATENT IS INVALID FOR OBVIOUSNESS AND FOR ANTICIPATION BY PRIOR INVENTION .................................................................................................21
iii
A. Because Claim 16 Merely Combines and Reduces the Size of Known Elements to Reach a Predictable Result, It Is Invalid for Obviousness.........................................................................................21
1. Every Element of Claim 16 Was Known in the Prior Art ........22
2. Claim 16 Combines Known Elements to Yield a Predictable Result .....................................................................26
B. Because Baxter Conceived of Every Element of Claim 16 Before Rochat and Reduced a Prototype to Practice Eight Months Before Rochat Filed His Patent Application, Claim 16 Is Invalid for Anticipation by Prior Invention ....................................35
1. Undisputed Evidence Shows That Baxter Conceived Every Element of Claim 16 by April 8, 1998, Prior to the Earliest Conception Date Asserted by Haemonetics ................36
2. Baxter Exercised Reasonable Diligence to Reduce the ALYX® System to Practice and, in Fact, Did Reduce the ALYX® System to Practice Eight Months Before Rochat Filed His Patent Application.....................................................44
II. UNDER A PROPER CONSTRUCTION OF “CENTRIFUGAL UNIT,” THE ALYX® SYSTEM DOES NOT INFRINGE CLAIM 16; UNDER THE DISTRICT COURT’S CONSTRUCTION, THE CLAIM IS INVALID FOR INDEFINITENESS ..........................................46
A. The District Court Erred by Construing “Centrifugal Unit” to Have Two Different Meanings in the Same Claim.............................46
B. As Interpreted by the District Court, Claim 16 Is Invalid for Indefiniteness.......................................................................................53
III. BECAUSE HAEMONETICS SOUGHT DAMAGES FOR FUTURE INFRINGEMENT, HAEMONETICS IS NOT ENTITLED TO AN INJUNCTION AGAINST THE ACCUSED DEVICE OR A PROVISIONAL ROYALTY ........................................................................59
CONCLUSION........................................................................................................63
iv
ADDENDUM
Amended Judgment (Aug. 19, 2009) ...........................................................A1
Claim Construction Order (Aug. 16, 2007)..................................................A2
Order Denying Fenwal’s Motion for JMOL of Prior Invention (Mar. 18, 2009) ...........................................................................................A23
Order Denying Fenwal’s Motion for JMOL of Noninfringement (Mar. 18, 2009) ...........................................................................................A24
Order Denying Fenwal’s Motion for JMOL of Obviousness (Mar. 18, 2009) ...........................................................................................A25
Order Granting Haemonetics’ Motion for a Permanent Injunction and Provisional Royalty and Haemonetics’ Motion for Prejudgment Interest (June 1, 2009) ................................................................................A26
Permanent Injunction and Provisional Royalty (June 1, 2009)..................A45
Order Granting in Part and Denying in Part Fenwal’s Motion to Modify the Permanent Injunction and to Alter or Amend the Order on Prejudgment Interest (June 24, 2009).........................................................A48
U.S. Patent No. 6,705,983, the Patent in Suit...........................................A105
Oral Statement of the District Court Denying Both Parties’ Motions for JMOL on the Issue of Indefiniteness (Jan. 28, 2009) .......................A3720
Oral Statement of the District Court Sua Sponte Reconsidering and Granting Haemonetics’ Motion for JMOL on the Issue of Indefiniteness (Jan. 29, 2009).................................................................A3791
v
TABLE OF AUTHORITIES
Page
CASES
Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313 (Fed. Cir. 2003) ..........................................................................53
In re Appelburg, 37 F.2d 620 (C.C.P.A. 1930) ..............................................................................32
Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc.,555 F.3d 984 (Fed. Cir. 2009) ............................................................................34
Bicon, Inc. v. Straumann Co., 441 F.3d 945 (Fed. Cir. 2006) ............................................................................47
Boston Scientific Scimed, Inc. v. Cordis Corp., 554 F.3d 982 (Fed. Cir. 2009) ............................................................................20
Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed. Cir. 1994) ............................................................................43
Canadian Ingersoll-Rand Co. v. Peterson Products of San Mateo, Inc., 223 F. Supp. 803 (N.D. Cal. 1963), aff’d in part, rev’d in part, 350 F.2d 18 (9th Cir. 1965) ................................................................................32
Chef America, Inc. v. Lamb-Weston, Inc., 358 F.3d 1371 (Fed. Cir. 2004) ....................................................................51, 52
Coleman v. Dines, 754 F.2d 353 (Fed. Cir. 1985) ............................................................................36
ConnectU LLC v. Zuckerberg, 522 F.3d 82 (1st Cir. 2008).................................................................................62
Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335 (Fed. Cir. 1998) ..........................................................................52
DSU Medical Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) ..........................................................................62
vi
Ecolochem, Inc. v. Southern California Edison Co., 227 F.3d 1361 (Fed. Cir. 2000) ..........................................................................31
Ericsson, Inc. v. Harris Corp., 352 F.3d 1369 (Fed. Cir. 2003) ..........................................................................20
Exxon Research & Engineering Co. v. United States, 265 F.3d 1371 (Fed. Cir. 2001) ..........................................................................53
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000), vacated, 535 U.S. 722 (2002)...........................32
Frigidaire Corp. v. General Necessities Corp., 46 F.2d 58 (6th Cir. 1931) ..................................................................................32
Garcia-Rubiera v. Calderon, 570 F.3d 443 (1st Cir. 2009)...............................................................................20
Gardner v. TEC Systems, Inc., 725 F.2d 1338 (Fed. Cir. 1984) (en banc) ..........................................................33
Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966)................................................................................................21
Herman Nelson Corp. v. John J. Nesbitt, Inc., 4 F. Supp. 703 (E.D. Mich. 1933), aff’d sub. nom. Herman Nelson Corp. v. American Blower Corp., 84 F.2d 171 (6th Cir. 1936) ....................................33
Holmwood v. Sugavanam, 948 F.2d 1236 (Fed. Cir. 1991) ....................................................................44, 45
Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367 (Fed. Cir. 1986) ..........................................................................44
Innogenetics, N.V. v. Abbott Laboratories, 512 F.3d 1363 (Fed. Cir. 2008) ..............................................................19, 61, 62
Innovative Scuba Concepts, Inc. v. Feder Industries, Inc., 26 F.3d 1112 (Fed. Cir. 1994) ............................................................................20
Invitrogen Corp. v. Clontech Laboratories, Inc., 429 F.3d 1052 (Fed. Cir. 2005) ..........................................................................43
vii
KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007).................................................................................... passim
In re Lindberg, 194 F.2d 732 (C.C.P.A. 1952) ............................................................................34
Mahn v. Harwood, 112 U.S. 354 (1884)............................................................................................52
Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572 (Fed. Cir. 1996) ............................................................................35
Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996) .....20, 32, 51
Omega Engineering, Inc. v. Raytek Corp., 334 F.3d 1314 (Fed. Cir. 2003) ..........................................................................49
Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348 (Fed. Cir. 2007) ..........................................................................28
Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) ..........................................................31
Powers-Kennedy Contracting Corp. v. Concrete Mixing & Conveying Co.,282 U.S. 175 (1930)......................................................................................31, 32
Ritchie v. Vast Resources, Inc., 563 F.3d 1334 (Fed. Cir. 2009) ....................................................................30, 35
S3 Inc. v. nVIDIA Corp., 259 F.3d 1364 (Fed. Cir. 2001) ..........................................................................20
Sandt Technology, Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344 (Fed. Cir. 2001) ..........................................................................36
Sitrick v. Dreamworks, LLC, 516 F.3d 993 (Fed. Cir. 2008) ............................................................................23
United States v. Kayser-Roth Corp., 272 F.3d 89 (1st Cir. 2001).................................................................................20
viii
Van Brode Milling Co. v. Cox Air Gauge System, Inc., 161 F. Supp. 437 (S.D. Cal. 1958)......................................................................33
Wilson Sporting Goods Co. v. Hillerich & Bradsby Co., 442 F.3d 1322 (Fed. Cir. 2006) ..........................................................................50
In re Wolfe, 251 F.2d 854 (C.C.P.A. 1958) ............................................................................32
Wynfield Inns v. Edward LeRoux Group, Inc., 896 F.2d 483 (11th Cir. 1990) ............................................................................62
STATUTES AND RULES
28 U.S.C. § 1295........................................................................................................1
28 U.S.C. § 1331........................................................................................................1
28 U.S.C. § 1338........................................................................................................1
28 U.S.C. § 2107........................................................................................................1
35 U.S.C. § 102........................................................................................................35
35 U.S.C. § 103............................................................................................21, 31, 34
35 U.S.C. § 112............................................................................................12, 51, 53
Federal Rule of Appellate Procedure 4......................................................................1
Federal Rule of Civil Procedure 50 .................................................................3, 4, 53
OTHER AUTHORITIES
Manual of Patent Examining Procedure § 2144.04 (8th ed. 2001, rev. 2008)...............................................................................33, 34
1 Dan B. Dobbs, Law of Remedies § 1.1 (2d ed. 1993)...........................................62
36 C.J.S. Federal Courts § 608 (2003)....................................................................60
ix
TABLE OF ABBREVIATIONS
Parties Baxter Baxter Healthcare Corporation Fenwal Baxter Healthcare Corporation and Fenwal Incorporated,
collectively (unless the context indicates otherwise) Haemonetics Haemonetics Corporation
Defined Terms
(___:____) Column and line number in patent ’163 patent U.S. Patent No. 5,656,163, issued August 12, 1997, entitled
“Chamber for Use in a Rotating Field to Separate Blood Components” (A7067-123)
’983 patent or the patent
U.S. Patent No. 6,705,983, issued March 16, 2004, entitled “Compact Centrifuge Device and Use of Same” (A105-15), the patent in suit
2RBC Two units of red blood cells A___ Appendix page(s) ALYX® system ALYX® Component Collection System; a portable
automated device that employs continuous centrifugation and a rigid disposable separation chamber to collect two units of red blood cells during one donation from a human donor
ALYX® separation cup or ALYX® cup or the accused device
The rigid, disposable vessel in which blood separation occurs in the ALYX® system, sold by Fenwal as part of the ALYX® Component Collection System disposable kits
court or district court United States District Court for the District of Massachusetts, Honorable Nathaniel M. Gorton presiding
Court United States Court of Appeals for the Federal Circuit examiner Patent and Trademark Office examiner JMOL Judgment as a matter of law MPEP Manual of Patent Examining Procedure (8th ed. 2001, rev.
2008)
x
PTO United States Patent and Trademark Office RBC(s) Red blood cell(s) All emphases in this brief are added and internal quotation marks are omitted unless otherwise indicated.
xi
STATEMENT OF RELATED CASES
After the jury verdict of infringement in this case (Haemonetics Corp. v.
Baxter Healthcare Corp., No. 05-cv-12572 (D. Mass.)), Fenwal redesigned its
ALYX® separation cups around Haemonetics’ ’983 patent, as that patent had been
interpreted by the district court. Fenwal has sought leave from the district court to
supplement its pleadings with a counterclaim seeking a declaration that the
redesigned cups do not infringe the ’983 patent under the district court’s
interpretation. Fenwal is aware of no other related case.
JURISDICTIONAL STATEMENT
The district court had jurisdiction under 28 U.S.C. §§ 1331 & 1338(a) and
entered an amended final judgment on August 19, 2009. This appeal, noticed on
August 27, 2009, is timely. 28 U.S.C. § 2107(a); Fed. R. App. P. 4. This Court
has jurisdiction under 28 U.S.C. § 1295(a)(1).
STATEMENT OF ISSUES
I. Invalidity: Whether Fenwal is entitled to judgment of obviousness
where the ’983 patent combines and reduces the size of prior-art centrifuges to
yield a result so predictable that the inventor did not even test the purported
invention; and whether Fenwal is entitled to judgment of anticipation by prior
invention where indisputable documentary and testimonial evidence shows that
Fenwal (i) conceived the invention no later than twelve days prior to Haemonetics’
earliest asserted invention date and (ii) actually reduced the invention to practice
eight months before Rochat filed the application for the ’983 patent.
II. Claim Construction/Noninfringement: Whether the court erred by
construing the term “centrifugal unit” to refer to an assemblage of a centrifugal
vessel and tubing in its first use in claim 16 of the ’983 patent, but then construing
that same term to refer to the centrifugal vessel alone in its second and third uses in
that very same claim; and whether the ALYX® system infringes under a proper
construction.
2
Indefiniteness: Whether the court erred by granting Haemonetics’ motion
for JMOL on the issue of indefiniteness and by denying Fenwal’s motion on the
same issue, when both the claim and specification give conflicting indications
about where to measure the “radius” and “height” of the “centrifugal unit” and the
parties presented conflicting evidence on the issue at trial; and whether Fenwal is
entitled to JMOL of invalidity due to indefiniteness in light of this conflicting
textual and extrinsic evidence.
III. Remedy: Whether Haemonetics was entitled to an injunction against
the accused device and a royalty on post-verdict sales when Haemonetics had
already sought and recovered from the jury damages for future infringing sales.
STATEMENT OF THE CASE
A. Preliminary Statement
Almost every element of Haemonetics’ asserted patent claim can be found in
one prior-art reference that the inventor knew about but did not disclose to the
examiner—Baxter’s ’163 patent covering its prior-art Amicus® centrifugation
device. The sole supposed “innovation” of Haemonetics’ ’983 patent is reducing
the dimensions of the cup in which fluid separation occurs. But this is a manifest,
common-sense solution to the known problem of larger-sized prior-art centrifuges,
and so the asserted patent claim is invalid, as a matter of law, for obviousness.
3
Even if there were something nonobvious about the dimensional limitations
of the ’983 patent, the defendants offered undisputed documentary and testimonial
evidence at trial showing that Baxter employees—who were working to
miniaturize the similar Amicus® device—independently conceived a separation
cup containing every element of the asserted claim before the inventor, including
the size limitations. Indisputable evidence also shows that Baxter reduced its cup
to practice eight months before the inventor. Thus, the patent is invalid for
anticipation by prior invention.
The district court’s errors on invalidity compounded its pre-trial error in
construing the term “centrifugal unit” to refer to two different objects in the very
same patent claim. Moreover, even if the district court’s construction of
“centrifugal unit” could be sustained, the patent is insolubly ambiguous regarding a
key element of the claim at issue, namely, where the “radius” and “height” of the
“centrifugal unit” should be measured, as shown by the conflicting intrinsic
evidence as well as the conflicting evidence presented by the parties at trial. The
court erred in granting—on sua sponte reconsideration and without explanation—
Haemonetics’ Federal Rule of Civil Procedure 50(a) motion for JMOL on the issue
of indefiniteness.
After granting Haemonetics’ motion for JMOL without explanation (let
alone a written opinion), the court committed a final error at the remedies phase of
4
the case: It granted Haemonetics a provisional royalty on and an injunction against
Fenwal’s post-verdict sales of the accused device, even though Haemonetics asked
the jury to award damages for future infringement and the jury’s instructions
imposed only a starting date, not an ending date, for the assessment of damages.
Such an impermissible double recovery cannot be sustained under the law.
B. Procedural History
On December 22, 2005, Haemonetics sued Baxter in the United States
District Court for the District of Massachusetts for infringement of the ’983 patent.
(A116-19.) Fenwal was later added as a defendant. (A62; A813-15.) The district
court on September 16, 2008 granted Fenwal’s motion for summary judgment of
noninfringement of claims 1-7 and 9 (A1214-25), based on the court’s construction
of disputed terms in claims 1-7, 9, and 16-19 (A2-17). Haemonetics ultimately
limited its allegation of infringement to claim 16 only. (A3538.)
At trial, Fenwal asserted, among other defenses, that claim 16 was invalid
for indefiniteness. At the close of evidence, both parties moved for JMOL on this
issue (and others) under Federal Rule of Civil Procedure 50(a). (A3585-86;
A3699-3700.) The court initially denied both motions (A3721), but, the very next
day and without any explanation, the court sua sponte reconsidered and granted
Haemonetics’ motion. (A3792.) The jury then determined that claim 16 was not
invalid and was infringed by Fenwal’s ALYX® separation cup. (A102-04.) It
5
awarded Haemonetics $11,335,935 in lost-profits damages and $4,349,835 in
reasonable-royalty damages. (A104.) The court also awarded prejudgment
interest of $2,321,494 (A51-52), for a total damage award of $18,007,264. (A1.)
In addition, the court entered a permanent injunction prohibiting Fenwal,
beginning on December 1, 2010, from making, using, distributing, offering to sell,
or selling “Alyx System disposable kits (as embodied by Trial Exhibit 1240),”
which include the separation cup. (A45.) The court also ordered Fenwal to pay
Haemonetics a 10% royalty on sales of the infringing ALYX® kits made after the
jury verdict of infringement. (A46.)
After trial, Fenwal timely moved for JMOL on the issues of invalidity due to
obviousness (A3892), anticipation by prior invention (A3848), and
noninfringement (A3868). The district court denied each motion by endorsement,
without an opinion. (A23-25.)
STATEMENT OF FACTS
A. Blood and Blood Donation
Human blood consists of four primary components: red blood cells (RBCs),
white blood cells, platelets, and plasma. (A548.) The primary function of red
blood cells is to carry oxygen to body tissues. (A3132.) RBCs are medically
useful in many situations, from replacing blood loss due to trauma or surgery to
treating diseases like hemophilia and anemia. (Id.)
6
There are two methods of obtaining RBCs (or any other individual blood
component) from a donor. Approximately 90% of blood donations are “manual
donations,” given as whole blood taken from a donor’s vein. (A3134.) Later, the
blood is separated into its constituent parts using a centrifuge or a filter. (A3131-
32.) The other method for obtaining RBCs, first developed in the 1960s and 1970s,
is called “apheresis.” (A3132.) In apheresis, whole blood is drawn from a donor
and separated while the donor is connected to an automated separation system. (Id.)
The desired blood components are immediately removed and stored. (Id.) The
other blood components are returned to the donor, along with a saline solution so
that when the donor completes the procedure blood volume has not changed. (Id.)
Because apheresis returns uncollected blood components to the donor, the process
can be used to collect two units of RBCs during one donation, as opposed to the
single unit of RBCs collected during a manual donation. (A548-49.) A unit of
RBCs is the quantity of red cells collected from approximately one pint of blood.
(A3133.)
Roughly 70 to 80% of blood collection in the United States takes place on
mobile blood drives run by organizations such as the American Red Cross.
(A3131.) Currently, Haemonetics sells two RBC apheresis devices that are
sufficiently portable for use at mobile drives: (1) MCS®+, introduced in 1995, and
(2) Cymbal™, introduced in 2007. (A1815.) Both of Haemonetics’ products
7
employ “batch processing,” in which a fixed volume of blood is withdrawn, then
separated, and then returned to the donor. (A1816; A7124.) This process repeats
many times until a full donation is collected. (A7124.)
In 2003, Fenwal introduced its portable RBC apheresis device, the ALYX®
system. (A1815-16.) In contrast to Haemonetics’ batch processing products, the
ALYX® system employs “continuous processing,” in which blood both enters and
exits the separation vessel during operation and is continuously withdrawn and
reinjected into the donor. (A1816; A7124.) Continuous processing provides a
faster donation time and higher quality RBC units than batch processing. (A3411-
12.)
B. Centrifugation, the ’983 Patent, and the Prior Art
The apheresis devices sold by Haemonetics and Fenwal, as well as the
technology described in the ’983 patent, employ centrifugation to separate blood
components. Centrifugation involves the placement of a fluid in a vessel, which is
then rotated at high speed, exerting a centrifugal force on the fluid. That force
separates the fluid’s components based on their different densities and rates of
settling, as illustrated below. (A3.)
8
(A184.) Because RBCs are the densest component of human blood, they are
pushed to the vessel’s outer wall as the vessel rotates. (Id.)
Haemonetics owns the ’983 patent by assignment from its inventor, a former
Haemonetics employee and Swiss national named Jean-Denis Rochat. (A7279-90;
A3142.) The patent “describes a method and apparatus for the separation and
collection of blood components through a continuous centrifugal system.” (A2.)
Entitled “Compact Centrifuge Device and Use of Same,” the ’983 patent relates to
a sub-assembly that comprises a vessel (or “cup”) in which fluid components are
separated through centrifugation, and the associated tubing through which fluid
flows in and out of the vessel. (A105-15.)
The tubing connects the spinning vessel to a non-rotating support structure
(and ultimately to the donor), and forms a question-mark shape around the vessel,
as shown below in a simplified version of figure 1 of the ’983 patent. (A3.)
9
Because the vessel is rotating, the tube also rotates to prevent the tube from
twisting and breaking. (Id.)
(A185.)
The claim at issue, claim 16, includes limitations directed toward the
dimensions of the “centrifugal unit.” It recites a “centrifugal unit having a radius
between 25 and 50 mm and a height between 75 and 125% of the radius.” (A115.)
Principles of continuous centrifugation have been known generally for many
years (A3), and were known in this particular art before Rochat applied for
the ’983 patent. See, e.g., U.S. Patent No. 4,109,855 (A219-25). Likewise, a
height-to-radius ratio within the range claimed in the ’983 patent is disclosed by,
among other things, the prior-art ’163 patent, which covers Baxter’s Amicus®
device and was invented by Baxter engineer Richard Brown. (A3162-63; A3185-
86; A7067-123.) Rochat, however, never disclosed the ’163 patent to the examiner
10
during prosecution of the ’983 patent (A105), even though he admitted that he
knew about it and “probably” had a copy of it in his files (A3185). The prior art
also discloses centrifugal vessels with radii between 25 and 50 mm, including
Haemonetics’ PCS® product, which has a radius of 40 mm. (A3148; A6103.)
Fenwal was denied access to almost all of the “18 feet of files” relating to
Rochat’s patent application. (A3158.)1 But from Rochat’s testimony and the
limited documents he produced, it is clear that he consulted the equations
developed by Richard Brown in his article, The Physics of Continuous Flow
1 Although Haemonetics brought this suit at Rochat’s urging (A6638),
Haemonetics successfully thwarted Fenwal’s efforts to obtain discovery from Rochat. Throughout discovery, Haemonetics stated it “[did] not control Mr. Rochat” (A1313), and that information concerning Rochat’s conception and reduction to practice was “not presently known to [Haemonetics]” (A1283). Left with no other option to gather this crucial discovery, Fenwal obtained in September 2007 a Letter of Request Pursuant to the Hague Convention. (A1029-34.) But when Rochat produced documents in September 2008, he produced them not through the Hague Convention procedures, but through Haemonetics’ counsel. (A2365-68.) And when Fenwal finally obtained a Hague Convention examination in November 2008 (just two months before trial), Rochat revealed that he had met with Haemonetics’ counsel prior to the proceedings. (A2314-15.) Haemonetics’ counsel represented Rochat at the examination, lodging objections to Fenwal’s questions. (A2298-99.) Yet when Rochat appeared on Haemonetics’ trial witness list (filed on January 2, 2009 (A1838)), and Fenwal objected that it still had not been able to depose him, Haemonetics’ counsel claimed that “Mr. Rochat cannot be made available by Haemonetics,” allegedly due to a “long-standing frigid relationship.” (A2589-90.) In light of this maneuvering, Fenwal moved to bar Rochat’s testimony at trial. (A2288-89.) But the court denied the motion, instead granting Fenwal a three-hour deposition on the eve of trial. (A73; A2588-93.) Haemonetics finally produced Rochat for a deposition at 5:30 p.m. on the night before trial began. (A2973.)
11
Centrifugal Cell Separation, 13 Artificial Organs 4 (1989) (A7124-40), to design
the claimed centrifugal device. (A3185; A6264.)
The series of equations developed by Brown consists of five variables and
two constants. (A3453.) As Brown himself explained at trial, “you can arrange
these [variables and constants] properly to give you any term you need to know.”
(Id.) Specifically, what Brown’s equations demonstrate is that the functionality of
a centrifuge turns on the area of the separation chamber, as measured at the
separation interface between the more-dense RBCs and the less-dense plasma,
typically in the middle of the chamber. (A3449-50; A3453; A7133.) Accordingly,
Brown testified that his equations use interior measurements of the separation
chamber—not exterior measurements—to calculate the required dimensions for a
functional centrifuge. (A3453.) Because the product of exterior height and radius
would not yield separation chamber area (or g-force), Brown testified that exterior
dimensions have no predictive value and do not relate to the functionality of the
centrifuge. (Id.)
As Brown’s seminal article shows, to calculate separation chamber area, one
would multiply the internal height of a chamber by its internal length (i.e., its
circumference). (Id.; see, e.g., A7134 (showing example of separation chamber “5
cm high” with a length of 13 cm, “resulting in separation chamber area[] of 65
[cm2]”).) If necessary, one could easily extrapolate a radius (r) measurement from
12
the length, or circumference (C), of the chamber through the known equation C =
2�r. (A3507; A3906 n.2.) Because it is the length of the separation chamber at the
interface that is relevant to calculating functional area, Brown testified at trial that
he would likewise measure the radius from the center of the centrifugal unit to the
blood interface. (A3453.)
C. Prosecution History of the ’983 Patent
Rochat first filed the application for the ’983 patent in the European Patent
Office on April 9, 1999. (A4571-5189 (prosecution history).) Issued claim 16
began as claim 15 of a translated Patent Cooperation Treaty application. (A4684-
85.) Original claim 15 contained no limitation regarding the height or radius of the
centrifugal unit. (Id.) Before the PTO, Rochat cancelled original claim 15 and on
October 6, 2001 added corresponding claim 36. (A4788.) Claim 36 contained the
limitation of a “centrifugal unit having a radius that is smaller than approximately
50 mm and a height that is approximately 75% greater than the radius.” (A4792.)
On April 3, 2003, in the only office action taken on the application, the
examiner rejected claim 36 under 35 U.S.C. § 112 ¶ 1 “as containing subject matter
which was not described in the specification in such a way as to reasonably convey
to one skilled in the relevant art that the inventor(s), at the time the application was
filed, had possession of the claimed invention.” (A4852.)
13
Otherwise, the examiner concluded, claim 36 would be allowable over the
prior art because
[t]he prior art of record does not teach or fairly suggest the recited blood centrifuge having a centrifugal unit with the claimed radius and height. Applicant has established the criticality of and therefore the nonobviousness of the radius and height parameters throughout the specification (including but not limited to size and weight reduction, ease of transport and handling, disposability and economical cost, and enabling the re-injection of the donor’s erythrocytes).
(A4854.)
In response to the office action, Rochat amended claim 36 on July 28, 2003
to its current form in issued claim 16. (A4867.)2 The ’983 patent issued on March
16, 2004. (A105.)
D. The ’983 Patent as Issued
As issued, claim 16 recites:
A centrifugal unit comprising a centrifugal component and a plurality of tubes, said unit to turn around an axis to separate the components of a liquid, blood in particular, with such plurality of tubes displaying a single tubular component wherein said unit includes:
a base in the form of a disk;
an external cylindrical wall extending from the base;
an internal cylindrical wall extending from the base and separated by the external wall so as to define a ring-shaped separation chamber among each other;
2 Rochat made a similar narrowing amendment to claim 40, which
corresponds to issued claim 20. (A4868.)
14
a tubular housing almost extending coaxially to said rotating axis from the base to receive an end of a tubular unit; and
a plurality of channels extending radially in the base of the centrifugal unit, with each channel providing communication between a respective tube of the tubular unit and the separation chamber, with the centrifugal unit having a radius between 25 and 50 mm and a height between 75 and 125% of the radius.
(A114-15.)
E. Development of the ALYX® System
In 1996, the Fenwal Division of Baxter3 began its Cygnet project with the
goal of creating a small, portable device for the collection of 2RBC that would
provide a donation time similar to that of whole blood donation. (A3342-43;
A3439-40.) In 1997, Baxter introduced its Amicus® device, which is designed
primarily to collect platelets. (A3343; A3439.) In the Amicus® system, blood
component separation takes place inside of a separation chamber made from
flexible plastic (a so-called “flexible bag”). (A3440.) As shown below, the
Amicus® separation chamber contains two separate sections wrapped around a
support mandrel. A first-stage processing chamber separates RBCs from platelet-
rich plasma, and a second-stage processing chamber then separates the platelets
from the plasma. (A3343.)
3 Fenwal became an independent corporation when Baxter divested its
Transfusion Therapies business (which includes the ALYX® system) in March 2007. (A813-14.) To be consistent with the trial record, this brief refers to the company that developed the ALYX® system as “Baxter.”
15
(A7086; see also A8988-89 (sample of a component of the Amicus® device, filed
with the Clerk’s office).)
As discussed in detail below (see infra at 28), in May 1997 Baxter scientist
Richard Brown, whose work Rochat relied on, conceived a device for collection of
2RBC by simply using the RBC-collecting half of the Amicus® separation chamber.
(A3454.) Eliminating the second-stage platelet processing chamber would, Brown
recognized, reduce the length (and, hence, the radius) of the Amicus® separation
chamber by approximately one-half. (Id.) As a result, the Cygnet team christened
its device—which would become the ALYX® system—the Amicus® Junior.
(A3342.)
In miniaturizing the Amicus® centrifuge, the Cygnet team experienced a
problem with the now-smaller flexible separation chamber wrinkling while in use.
16
(A3440.) But in March 1998, Baxter engineer Kelly Smith and her colleagues
solved this problem by designing a chamber made of hard, molded plastic instead
of flexible plastic. (A3345; A3440-41.) Thus, in early April 1998, the Cygnet
team repeatedly documented its conception in an effort to determine how to best
manufacture the commercial product. (A3344-51; A5190; A6642-7062; A7205-12;
see also infra Part I.B.1.) Baxter’s first successful test of an ALYX® prototype
occurred in August 1998. (A3353-54; A6419-25; see also infra Part I.B.2.)
F. The ALYX® System
Baxter began selling the ALYX® system in 2003. (A1815.) Consistent with
the goal of the Cygnet project, the ALYX® system is a portable automated device
that employs continuous centrifugation to collect two units of RBC per donation.
(Id.) This case centers around the rigid, disposable vessel in which blood
separation occurs. In the depiction below, a portion of the vessel has been
removed to show the internal separation chamber.
17
(A8955-56; see also A8987; A8990 (physical exhibits of the ALYX® separation
chamber, filed with the Clerk’s office).) Fenwal sells the vessel as part of the
ALYX® system disposable kits, which contain all the supplies needed for one
donation, including a needle, saline solution, and anticoagulant. (A3413.)
SUMMARY OF ARGUMENT
I. The district court erred by denying Fenwal’s motions for JMOL that
claim 16 of the ’983 patent is invalid.
Obviousness: The prior art discloses every element of claim 16. The result
of combining and, at most, reducing the size of these known elements was so
predictable that the inventor himself saw no need to even test the purported
invention. Indeed, Haemonetics and Rochat both conceded that the “innovation”
of the ’983 patent is reducing and proportioning the dimensions of the separation
cup. But the Supreme Court has long held that a reduction in size or change in
proportion is an unpatentable application of mere mechanical skill. In light of the
predictability of result and the common-sense demand for a centrifuge of reduced
size, claim 16 is obvious under KSR International Co. v. Teleflex Inc., 550 U.S.
398 (2007).
Prior Invention: The testimony of Baxter engineer Kelly Smith, the
documentary evidence of the development process, the corroborating testimony of
other Baxter employees, and the expert testimony of Dr. Robin Felder—none of
18
which was disputed—establish as a matter of law that the Baxter team completed
the “mental act” of miniaturizing the Amicus® device on or before April 8, 1998,
which was twelve days prior to Haemonetics’ earliest asserted conception date.
This evidence also shows without dispute that Baxter actually reduced the ALYX®
system to practice nearly eight months before Rochat filed the application that led
to the ’983 patent. Accordingly, claim 16 is also invalid for anticipation by prior
invention.
II. Claim Construction/Noninfringement: The district court erred by
construing the term “centrifugal unit” to refer to the assemblage of the separation
cup and tubing in the term’s first usage in claim 16, and to refer to the separation
cup alone in the term’s second and third usages in that same claim. The district
court’s effort to correct what Haemonetics claimed was a drafting “error”
improperly created an internal inconsistency in the claim and disregarded the plain
language of the patent, which makes clear that “centrifugal unit,” as used in claim
16, refers to the assemblage of the cup and tubing. Moreover, because the size of
this assemblage determines the overall size of the device, this construction accords
with what Rochat and Haemonetics stated to be the purpose of the ’983 patent—to
provide a portable centrifuge of reduced size over the prior art. Because Fenwal’s
ALYX® system infringes only if the dimensions of the “centrifugal unit” are
measured to the external outermost points of the separation cup alone (i.e., not
19
including the tubing), Fenwal is entitled to a judgment of noninfringement as a
matter of law under a proper claim construction.
Indefiniteness: Even if the district court’s construction of “centrifugal unit”
as limited to the cup itself could be sustained, the district court erred by granting
Haemonetics’ motion for JMOL on the issue of indefiniteness. Claim 16 recites a
“centrifugal unit” with a “height” and “radius” within certain ranges, but the patent
gives no definitive answer as to how those dimensions should be measured, as
shown by the patent itself and the conflicting evidence presented at trial. In light
of this ambiguity, the district court’s grant of JMOL to Haemonetics should be
reversed, and JMOL should be entered in Fenwal’s favor.
III. Injunction and Going-Forward Royalty: Because Haemonetics
repeatedly requested damages for future infringement and the jury awarded
damages under an instruction that set forth a starting date—but no ending date—
for damages assessment, the district court erred under Innogenetics, N.V. v. Abbott
Laboratories, 512 F.3d 1363, 1380 (Fed. Cir. 2008), by additionally granting
Haemonetics an injunction against future sales of the ALYX® kit and awarding
Haemonetics a 10% royalty on post-verdict sales of ALYX® kits. This Court
should vacate the district court’s order of permanent injunction and provisional
royalty.
20
STANDARDS OF REVIEW
This Court “review[s] a district court’s grant or denial of a motion for JMOL
in a patent case de novo, reapplying the JMOL standard used by the district court.”
Ericsson, Inc. v. Harris Corp., 352 F.3d 1369, 1373 (Fed. Cir. 2003). Under that
standard, the Court reviews “the jury’s conclusions on obviousness, a question of
law, without deference.” Boston Scientific Scimed, Inc. v. Cordis Corp., 554 F.3d
982, 990 (Fed. Cir. 2009). Likewise, “[p]riority of invention is a question of law to
be determined based upon underlying factual determinations.” Innovative Scuba
Concepts, Inc. v. Feder Indus., Inc., 26 F.3d 1112, 1115 (Fed. Cir. 1994). Claim
construction and interpretation are questions of law reviewed de novo, see
Markman v. Westview Instruments, Inc., 52 F.3d 967, 970-71 (Fed. Cir. 1995) (en
banc), aff’d, 517 U.S. 370 (1996), and because the issue of indefiniteness “is a
matter of construction of the claims,” it, too, “receives plenary review on appeal,”
S3 Inc. v. nVIDIA Corp., 259 F.3d 1364, 1367 (Fed. Cir. 2001). The Court reviews
the decision to grant or deny an injunction for abuse of discretion, Garcia-Rubiera
v. Calderon, 570 F.3d 443, 455-56 (1st Cir. 2009), but a “district court by
definition abuses its discretion when it makes an error of law,” United States v.
Kayser-Roth Corp., 272 F.3d 89, 100 (1st Cir. 2001).
21
ARGUMENT
I. CLAIM 16 OF THE ’983 PATENT IS INVALID FOR OBVIOUSNESS AND FOR ANTICIPATION BY PRIOR INVENTION
A. Because Claim 16 Merely Combines and Reduces the Size of Known Elements to Reach a Predictable Result, It Is Invalid for Obviousness
Under 35 U.S.C. § 103(a), “[a] patent may not be obtained . . . if the
differences between the subject matter sought to be patented and the prior art are
such that the subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art.” The analysis
under § 103 is objective and proceeds as follows: “the scope and content of the
prior art are to be determined; differences between the prior art and the claims at
issue are to be ascertained; and the level of ordinary skill in the pertinent art
resolved.” KSR, 550 U.S. at 406 (quoting Graham v. John Deere Co. of Kan. City,
383 U.S. 1, 17 (1966)). A straightforward application of these factors shows that
the prior art disclosed every element of claim 16 and that the only difference (if
any) between the prior art and the patent claim is the reduced size of the device. In
view of the clear desirability of a smaller centrifuge and the predictability that a
smaller centrifuge would function successfully, claim 16 is invalid for obviousness.
The district court erred by denying—without explanation—Fenwal’s motion for
JMOL of invalidity due to obviousness.
22
1. Every Element of Claim 16 Was Known in the Prior Art
The evidence and testimony presented at trial indisputably show that the
prior art disclosed every element of claim 16. Haemonetics presented two
witnesses on the prior art: the inventor, Rochat, and an expert, Dr. George Russell.
Rochat and Russell, while conceding that all other elements of the claim were
disclosed in the prior art, maintained that the prior art may not have disclosed a
plurality of channels extending radially in the base of the centrifugal unit and did
not disclose a centrifugal unit with a 75 to 125% height-to-radius ratio or a radius
between 25 and 50 mm. (A3153-55; A3207-08.) But the prior art—including
the ’163 patent, which Rochat knew about but did not disclose in the ’983
application (A3185; A3495)—plainly discloses each of those elements, as
Fenwal’s expert, Dr. Robin Felder, made clear. (A3506-07.)
a. Plurality of channels extending radially in the base. As Dr. Felder
testified (id.), items 92, 94, 96, 98, and 100 in figure 24 of the ’163 patent disclose
the limitation of “a plurality of channels extending radially in the base of the
centrifugal unit, with each channel providing communication between a respective
tube of the tubular unit and the separation chamber.”4
4 In its Markman order, the district court construed “channels extending
radially in the base” to mean “channels extending radially in or on the base.” (A17.)
23
(A7087.) Rochat and Russell, on the other hand, testified that they were uncertain
whether the prior art disclosed this limitation. (See A3155 (Rochat: “[N]ot totally
sure.”); A3208 (Russell: “I’m a little fuzzy about the channels being in the prior
art . . . .”).) These witnesses’ subjective “fuzziness” on the subject does not create
a genuine dispute. See Sitrick v. Dreamworks, LLC, 516 F.3d 993, 1001 (Fed. Cir.
2008) (equivocations do not create a genuine issue of fact).
b. Height-to-radius ratio. At trial, Rochat measured a sample Amicus®
device and conceded that it disclosed a height-to-radius ratio within the 75 to 125%
range claimed. Rochat testified that the device had a diameter of 15¼ cm (for a
radius of 7� cm) and a height of 7¾ cm, for a height-to-radius ratio of 101.6%.
(A3162-63.)
24
Similarly, the ’163 patent discloses a centrifugal unit with a height between
75 and 125% of the radius, as Dr. Felder testified. (A3507.) Figure 18 and table 2
of the ’163 patent, shown below, disclose a chamber with an “Overall length (A),”
or circumference, of 19½ inches.
(A7083; A7112.) Dividing this circumference by � yields a diameter of 6.21
inches, and further dividing by 2 yields a radius of 3.10 inches. The ’163 patent
also discloses a chamber with an “Overall height (B)” of 213/16 inches. This height
is 90.6% of the radius, within the 75 to 125% range recited in claim 16.
25
c. Radius between 25 and 50 mm. The prior art also discloses a
“centrifugal unit having a radius between 25 and 50 mm.” As Rochat testified,
Haemonetics’ own PCS® product is prior art with a radius of 40 mm. (A3148; see
also A3220; A6103.) The exhibit Haemonetics used at trial to document Rochat’s
conception (excerpted below) shows that he compared the machine he was
developing, the “Biofluid Lasso” centrifuge, with Haemonetics’ prior-art device,
which had a diameter of 80 mm, i.e., a radius of 40 mm. (A3148.)
(A6103.)
Likewise, the first-stage RBC-processing chamber described in the ’163
patent—which Baxter used as the starting point for its 2RBC chamber (see infra at
28)—has a length of 10� inches (or 257.175 mm), for a radius of 40.93 mm when
wrapped around the support mandrel, as described in that patent. (A7112 tbl.2.)
Finally, as explained below, Brown’s predictive equations, which Rochat relied on,
clearly teach one of skill in the art how to design a centrifuge with a radius
between 25 and 50 mm. Thus, the prior art discloses every element of claim 16.
26
2. Claim 16 Combines Known Elements to Yield a Predictable Result
a. Claim 16 cannot withstand scrutiny under the common-sense
approach to obviousness set forth in KSR and this Court’s precedents. In KSR, the
Court wrote that
[w]hen there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.
550 U.S. at 421. The lone “improvement” claimed by Rochat over the prior art
was reducing and proportioning the dimensions of the separation cup. (A3186.)
But in light of the common-sense need for smaller centrifugal devices, it was
obvious to reduce the size of those prior-art devices through equations known in
the literature. Indeed, the ’983 patent itself notes the “obvious” desirability of
smaller devices. (A113 (8:35-37).) At trial, witnesses from both sides recognized
that developing a smaller device was crucial to conducting RBC apheresis on a
large scale, given that most blood is collected in mobile settings. (See, e.g., A3135
(Vice President and Chief Medical Officer of Haemonetics); A3342 (Baxter’s
Kelly Smith); A3406 (Fenwal’s Senior Director of International Sales).)
Furthermore, a successful result from a centrifuge of reduced size was entirely
predictable—as shown by Rochat’s determination that testing the height and radius
27
was unnecessary. (A3155-56.) Claim 16 is therefore invalid for obviousness
under KSR, and the district court erred by denying Fenwal’s motion for JMOL.
In light of the predictive equations developed by Richard Brown, it would
have been obvious for a person skilled in the art5 to use those equations to design a
centrifugal device with a radius between 25 and 50 mm. (A3507 (Dr. Felder
testifying that “[a]ll the elements are [in the prior art] to make that device, and you,
simply, reduce the size by half, using known equations in the literature”).) Indeed,
for the Cygnet team, it was a matter of common sense to create a smaller
separation device that collected RBCs only. It eliminated the second-stage
platelet-collecting section of the Amicus® separation chamber and thereby reduced
the overall radius of the separation chamber by about one-half. As Dr. Felder
explained at trial, the Amicus® separation unit
is a much larger unit, but as we know from the [’163] patent . . . the emphasis in this patent was to separate multiple components of blood as opposed to the two-[unit] red blood cell device, which the ALYX represents (indicating). So, [the Amicus®] has much more blood to separate (indicating). So, it would have been obvious to take one component of that, which is just the red cell separation [chamber], and reduce the size by half.
(Id.)
5 Dr. Felder testified that a person of ordinary skill in the art would have a
bachelor’s degree in engineering with two years of experience with centrifugation technology and separation principles. (A3500; A3511.) Haemonetics’ expert agreed that a person of ordinary skill in the art would be an engineer. (A3205.)
28
Cutting off the platelet chamber is exactly what Richard Brown did when he
pitched the idea of a smaller, portable 2RBC device to Baxter’s Cygnet team in
May 1997:
I showed them the Amicus separation system . . . . And it’s broken out into two chambers, as you can see. This side looks like the one we separate the platelets in, and the other side is for red cells. And you put blood into the red cell side, and out comes packed cells at a very high concentration, a concentration very suitable for collecting a double red cell product. And I said this is what you need to get a good product, I said, but not exactly. And I already precut this bag and I grabbed both ends. . . . I just snapped it. This is all you need. And I held up the little red cell. . . . And I had been babying a coffee cup. And I wrapped the chamber around the cup and said that’s all your rotor needs to be.
(A3454.) Here, as in KSR, there was an identified problem—the large size of
prior-art centrifuges—and a common-sense solution that was obvious to try—
taking existing devices and making them smaller.
Because of Brown’s predictive equations, a “skilled artisan would have had
a reasonable expectation of success” with the device claimed in the ’983 patent.
Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1361 (Fed. Cir. 2007). In fact, Rochat
testified that once he “conceived” the height-to-radius ratio claimed in the ’983
patent, he was so certain his device would work that he performed no testing:
Q. . . . Please tell the jurors was there any testing, actual testing of various prototypes or any testing whatsoever to establish in your mind that the one to one ratio was invention?
29
A. I did not do any test. It is a question of geometry, and for a geometry question, you don’t need any tests to do with blood and anything.
(A3155.) When Rochat equivocated about whether he tested various radii and
heights in developing the ’983 patent, he was impeached with the following
testimony from his deposition:
Question: You recall that certain testing was done to determine the optimal dimensions that are set forth in your patent?
. . . .
Answer: We did not test several radius and several H, because that is really – it is – you don’t really have to test that.
Question: Because that’s in the formula, that’s in calculations?
Answer: Yeah, yeah.
Question: And anybody can get that; that’s not new, correct?
Answer: Uh-huh.
(A3156.)
Rochat’s testimony that it was unnecessary to test the device because the
smaller radius and height were “not new,” shows that his combination of known
elements yielded predictable success. In fact, a successful result from a centrifuge
of reduced dimensions was so predictable that Baxter engineers Kelly Smith and
Thomas Westberg testified they did not even consider seeking a patent on the
ALYX® dimensions. (A3365; A3444.) Westberg explained: “We didn’t see
30
anything novel about the dimensions. They were based on Rich Brown’s
formula. . . . [W]e saw no reason to patent that.” (A3444.)
Recently, in Ritchie v. Vast Resources, Inc., this Court wrote that
[a]mong the inventions that the law deems obvious are those modest, routine, everyday, incremental improvements of an existing product or process that confer commercial value (otherwise they would not be undertaken) but do not involve sufficient inventiveness to merit patent protection. This class of inventions is well illustrated by efforts at routine experimentation . . . .
563 F.3d 1334, 1337 (Fed. Cir. 2009). Rochat, like the inventor in Ritchie, created
his device by the “routine” application of mechanical skill—i.e., using Brown’s
predictive equations to reduce the size of the prior art. Rochat himself admitted the
“common,” rudimentary nature of his claimed advancement:
Q. . . . How does what you developed and which ultimately became the Rochat ’983 patent differ from what had been done previously, as far as you know?
A. It was generally the weight and generally the dimensions of the machines were a lot larger, and I think it’s a common process in the technology that, at the beginning, we don’t look to be as small and as smart as possible. It’s a common way to work. I don’t have no reason why nobody thought about that earlier.
(A3151.)
In short, claim 16 responds to the common-sense need for smaller
centrifuges in a common-sense way—reducing the size of prior-art centrifuges.
Because the centrifuge developed by Rochat simply combined known elements
31
and functioned in a manner so predictable that it required no testing, claim 16 is
invalid for obviousness under KSR.6
b. The Supreme Court has long held that merely changing the
dimensions of a known apparatus is an obvious alteration. In Powers-Kennedy
Contracting Corp. v. Concrete Mixing & Conveying Co., the holder of a method
and apparatus patent for transporting concrete argued that he had “discovered new
principles, namely, that concrete could be moved by compressed air.” 282 U.S.
175, 184 (1930). However, the Supreme Court noted that “[m]ethods and
apparatus for moving concrete by compressed air had been previously invented”
and that “[o]ther apparatus closely approximating that of the patent in suit had been
used for transporting grout.” Id. Powers-Kennedy flatly rejected the patentee’s
argument that these methods and apparatus “were unfit for concrete” because “the
pipes and parts were not of sufficient size.” Id. at 185. Instead, the Court held that
“obviously a mere change in proportion would involve no more than mechanical
skill and would not amount to invention.” Id.7
6 The near-simultaneous development of the device by both Baxter and
Rochat (see infra Part I.B.) further shows that the invention would have been obvious to one of skill in the art. See Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1379 (Fed. Cir. 2000). Haemonetics did not argue in either its closing argument or JMOL brief that any secondary considerations supported a finding of nonobviousness. (A3800-08; A3958-68.)
7 While the nonobviousness requirement of § 103 has since replaced the “invention” standard, cases arising prior to the 1952 Patent Act still frequently provide guidance. See, e.g., Phillips v. AWH Corp., 415 F.3d 1303, 1315-16 (Fed.
32
In accord with Powers-Kennedy, many courts, including this Court’s
predecessor, have routinely held that a mere reduction in the dimensions of a
known device is not patentable. See, e.g., In re Wolfe, 251 F.2d 854, 856 (C.C.P.A.
1958) (“[G]iven the idea of using a roller for massage, we see nothing patentable in
making the roller small enough and of an appropriate material for oral use. The
differences are mere change of size and substitution of material of the most
obvious kind, on a par with the differences between a hairbrush and a toothbrush.”);
In re Appelburg, 37 F.2d 620, 621 (C.C.P.A. 1930) (“While decreasing or
increasing the size of the known units . . . may produce a valuable and efficiently
working mechanism which is conducive to commercial success, this fact does not
necessarily suggest invention.”); Frigidaire Corp. v. Gen. Necessities Corp., 46
F.2d 58, 59 (6th Cir. 1931) (“[I]t was not invention to put [a smaller device] into
practice by utilizing the well-known elements of the larger devices.”); Canadian
Ingersoll-Rand Co. v. Peterson Prods. of San Mateo, Inc., 223 F. Supp. 803, 807
(N.D. Cal. 1963) (“[T]here is no invention in merely making a smaller, more
compact version of well known devices . . . .”), aff’d in part, rev’d in part, 350 (continued…) Cir. 2005) (en banc); Markman, 52 F.3d at 977-78; see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 602 (Fed. Cir. 2000) (Michel, J., concurring in part and dissenting in part) (“[M]ore recent Supreme Court cases . . . are remarkable in the degree to which they cite nineteenth century cases, and in their express insistence on adhering to older precedent.”) (citations omitted), vacated, 535 U.S. 722 (2002).
33
F.2d 18 (9th Cir. 1965); Van Brode Milling Co. v. Cox Air Gauge Sys., Inc., 161 F.
Supp. 437, 442 (S.D. Cal. 1958) (“[M]ere changes of size . . . do not amount to
patentability.”); see also Gardner v. TEC Sys., Inc., 725 F.2d 1338, 1341, 1345
(Fed. Cir. 1984) (en banc) (affirming ruling of invalidity for obviousness where a
prior-art patent disclosed all except “dimensional limitations” of a device with
“narrower nozzles” than the prior-art patent); MPEP § 2144.04 (“Changes in
Size/Proportion” “normally require only ordinary skill in the art and hence are
considered routine expedients . . . .”).
Invalidating a patent on a radiator smaller and lighter than prior radiators,
one court summarized why mere changes in size do not warrant patent protection:
It is true that a smaller unit was desired. That desire is still with us. A heating unit which would properly heat and ventilate a room without occupying more space than the lady’s thimble would be still more desirable than what we now have. Bigness is not a thing to be desired in heaters and ventilators. It is not a matter of taste, but just a matter of common sense. . . . Every schoolboy who bumps his head against one of these units is still wishing it were smaller. It is not invention to make something smaller and lighter. . . . Such a builder is not an inventor, but, at best, a good mechanic.
Herman Nelson Corp. v. John J. Nesbitt, Inc., 4 F. Supp. 703, 706 (E.D. Mich.
1933), aff’d sub. nom. Herman Nelson Corp. v. Am. Blower Corp., 84 F.2d 171
(6th Cir. 1936). In other words, common sense—a paramount consideration under
KSR—teaches that there is almost always a demand for, and commercial value in, a
34
smaller device. A smaller version of known elements is thus an obvious and
unpatentable mechanical change.
Haemonetics acknowledged at the Markman hearing that “what is new and
what is claimed to be unique is reducing and proportioning the dimensions of the
[separation] cup.” (A901.) Rochat similarly admitted at trial that “[i]t is [the]
purpose of the patent to reduce the size of the factor of 2 . . . . It’s really the
purpose of the patent.” (A3186.) Such mechanical changes are not patentable
under § 103.8
c. Applying the common-sense approach of KSR, this Court in Ball
Aerosol & Specialty Container, Inc. v. Limited Brands, Inc. ordered a district court
to grant judgment of obviousness where “the prior art disclose[d] all the limitations
of the claims,” the patent addressed “a known problem,” and the claimed invention
“would have been entirely predictable and grounded in common sense.” 555 F.3d
8 It was therefore error for the examiner to allow the radius and height limitations on the basis of “size and weight reduction” and “ease of transport and handling.” A4854; see In re Lindberg, 194 F.2d 732, 735 (C.C.P.A. 1952) (“[I]t is not regarded as inventive to merely make an old device portable or movable without producing any new and unexpected result.”); accord MPEP § 2144.04 ¶ V(A) (“Fact that a claimed device is portable or movable is not sufficient by itself to patentably distinguish over an otherwise old device unless there are new or unexpected results.”).
The examiner’s remaining grounds for allowing the radius and height limitations—“disposability and economical cost” and “enabling the re-injection of the donor’s erythrocytes” (A4854)—plainly do not withstand scrutiny. Apheresis devices with inexpensive, disposable separation chambers were well-known in the prior art, as shown by, among many other examples, the ’163 patent (which Rochat knew about but did not disclose to the examiner), and the Amicus® device.
35
984, 991, 993 (Fed. Cir. 2009); see also Ritchie, 563 F.3d at 1337 (invalidating
patent claim that substituted borosilicate glass (“a standard product with well-
known properties”) for ordinary glass in a sexual aid because the substitution “was
not a venture into the unknown”). Here, too, the prior art contains every limitation
of claim 16. Common sense taught that a smaller centrifugal device would have
been desirable. (See, e.g., A3135; A3342; A3406.) And known equations gave
Rochat a reasonable expectation that his resized device would function properly, as
shown by his stated view that testing the radius and height was wholly unnecessary.
(A3155-56.) The district court’s denial of Fenwal’s motion for JMOL should be
reversed, and judgment of obviousness should be entered in Fenwal’s favor.
B. Because Baxter Conceived of Every Element of Claim 16 Before Rochat and Reduced a Prototype to Practice Eight Months Before Rochat Filed His Patent Application, Claim 16 Is Invalid for Anticipation by Prior Invention
A person is not entitled to a patent if, “before such person’s invention
thereof, the invention was made in this country by another inventor who had not
abandoned, suppressed, or concealed it.” 35 U.S.C. § 102(g)(2). This Court has
held that “priority of invention goes to the first party to reduce an invention to
practice unless the other party can show that it was the first to conceive the
invention and that it exercised reasonable diligence in later reducing that invention
to practice.” Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed. Cir. 1996).
Undisputed evidence shows that Baxter conceived every element of claim 16
36
before Rochat and that Baxter was the first to reduce the invention to practice. In
light of this evidence, the district court erred by denying (again, without
explanation, A23) Fenwal’s motion for JMOL of anticipation by prior invention.
1. Undisputed Evidence Shows That Baxter Conceived Every Element of Claim 16 by April 8, 1998, Prior to the Earliest Conception Date Asserted by Haemonetics
Conception is “the complete performance of the mental part of the inventive
act. All that remains to be accomplished, in order to perfect the act or instrument,
belongs to the department of construction, not invention.” Coleman v. Dines, 754
F.2d 353, 359 (Fed. Cir. 1985). Conception is analyzed under a “rule of reason”
that requires consideration of the totality of the evidence. See Sandt Tech., Ltd. v.
Resco Metal & Plastics Corp., 264 F.3d 1344, 1350-51 (Fed. Cir. 2001). At trial,
Haemonetics asserted conception on April 20, 1998. (A3802.)9 But Fenwal,
having begun work on miniaturizing the Amicus® device in 1997, conceived of
every element of claim 16 no later than April 8, 1998.
a. Thomas Westberg testified at trial that he led the Baxter Cygnet team,
whose goal “was to create a small, portable 2RBC device.” (A3439.) As
discussed above, in May 1997, Richard Brown presented to the Cygnet team an
9 Haemonetics based this assertion on a document that Rochat claimed showed a “one-to-one” height-to-radius ratio. (A3143-45; A6264.) But Rochat did not include the “one-to-one” ratio in the original patent claim that became claim 16. (A4684-85.) In addition, the document does not disclose many other elements of claim 16. (A3505; A6264.) At trial, Rochat did not even compare this document to claim 16. (See A3139-63; A3184-96.)
37
idea for a smaller centrifuge—based on the Amicus® system—that could collect
2RBC. To illustrate how that device would have a separation chamber about one-
half the size of the Amicus®, Brown simply took the two-chambered Amicus®
separation chamber, snapped it in half, and wrapped the red-cell chamber around
the coffee cup he was holding. (A3454; see supra at 28.) Accordingly, as Kelly
Smith explained, the Cygnet team grew to call its work-in-progress “the Amicus
Junior . . . because for our needs we didn’t need [the] entire [Amicus®] separation
chamber.” (A3342.) Brown, Westberg, and Smith worked on designing the
“Amicus® Junior” throughout 1997. (A3454.)
b. Smith testified in detail about her early-1998 work on the miniaturized
Amicus® separation chamber, which would later become the accused ALYX®
separation cup. Describing a drawing dated March 11, 1998 (excerpted below),
Smith noted that it shows a 2RBC flexible bag separation chamber based on “one-
half of the Amicus.” (A3344.) Specifically, the drawing shows a centrifugal unit
that turns around an axis; a plurality of tubes displaying a single tubular component
(the umbilicus); a disk-shaped base; external and internal walls defining a ring-
shaped separation chamber; a coaxial tubular housing; and a separation-chamber
diameter of 2.75 inches (or 69.85 mm), for a radius of 34.93 mm, “approximately
half of the Amicus diameter.” (Id.)
38
(A6649.)
As discussed, as the Cygnet team reduced the dimensions of the Amicus®
device, the flexible separation chamber experienced wrinkling problems. (A3345;
A3440.) In late March 1998, the team resolved this problem by using a molded
chamber. (A3345.) On April 1, 1998, Smith and her colleague Michel Joie
exchanged the first sketches of a rigid separation chamber. (Id.) As the excerpts
below show, these sketches illustrate a centrifugal unit turning around an axis, with
a plurality of tubes, a single tubular component, external and internal walls
defining a ring-shaped separation chamber, and channels in the base. (See A3346.)
39
(A6642.)
Smith testified that as of April 8, 1998, Baxter had decided to pursue a
structure for the cup consisting of an annular top molded into a bottom plate
containing channels for blood flow. (A3348; A3351.) As the excerpt below shows,
this model has a disk-shaped base and a plurality of channels that extend radially in
that base.
(A5190.)
40
Finally, as shown below, Smith created a sketch on April 8, 1998 showing
the internal dimensions of this rigid separation chamber in relation to the formula
for the area of the separation chamber. (A3349-50.)
(A7211.) To calculate the height and radius above, Smith testified that the Cygnet
team aimed to create a chamber with an area of 100 cm2 because that is the area of
the RBC chamber in the Amicus® device. (A3350.) Beginning with an area of 100
cm2, Smith determined that a separation chamber with an internal radius of 3.4 cm
(or 34 mm—within the range claimed in the ’983 patent) and an internal height of
4.7 cm (or 47 mm), would function properly. (Id.)
Thus, as Smith put it, by April 8 Baxter had the “full concept” for the
ALYX® system, including the separation cup. (A3351.) After that date, Smith
testified, “we began designing it on the computer in preparation for building our
first prototypes.” (Id.) The following chart shows where—in addition to the prior-
art Amicus® device and ’163 patent—each element of claim 16 can first be seen in
the evidentiary record:
41
Element Text Document (Date)
16A A centrifugal unit comprising a centrifugal component and a plurality of tubes,
A6646-50 (March 11, 1998)
16B said unit to turn around an axis to separate the components of a liquid, blood in particular,
A6646-50 (March 11, 1998)
16C with such plurality of tubes displaying a single tubular component
A6646-50 (March 11, 1998)
16D wherein said unit includes: a base in the form of a disk;
A6646-50 (March 11, 1998)
16E an external cylindrical wall extending from the base;
A6646-50 (March 11, 1998)
16F an internal cylindrical wall extending from the base and separated by the external wall so as to define a ring-shaped separation chamber among each other;
A6646-50 (March 11, 1998)
16G a tubular housing almost extending coaxially to said rotating axis from the base to receive an end of a tubular unit; and
A6646-50 (March 11, 1998)
16H a plurality of channels extending radially in the base of the centrifugal unit, with each channel providing communication between a respective tube of the tubular unit and the separation chamber,
A5190 (April 7, 1998)
16I with the centrifugal unit having a radius between 25 and 50 mm and
A6646-50 (March 11, 1998)
16J a height between 75 and 125% of the radius.
Baxter’s Amicus® device (1997) (A3439); ’163 patent (1997) (A7067-123); Brown’s equations (1989) (A7124-40)
42
Thomas Westberg, the Cygnet team leader, corroborated Smith’s conception
testimony. At trial, reviewing the same documents as Smith, Westberg reiterated
that “the concept from April 1” was what Baxter “refined” and “tested” over the
next several months to develop the commercial version of the ALYX® system.
(A3440-42.) Likewise, Fenwal’s expert, Dr. Felder, testified that the document
containing Smith’s April 8 sketch contained every element of claim 16 of the ’983
patent. (A3504.) On cross-examination, Haemonetics did not challenge Dr.
Felder’s interpretation of Smith’s development documents. (A3508-16.) Yet on
Fenwal’s motion for JMOL, the district court gave no reason why this indisputable
evidence did not establish Baxter’s prior invention. Instead, the court simply
denied Fenwal’s motion by endorsement. (A23.)
c. Haemonetics has claimed that Fenwal cannot show prior invention
because Baxter did not recognize and appreciate the invention of “a height between
75 and 125% of the radius,” emphasizing that Smith’s invention documents do not
specifically articulate that limitation. (A3936-39.) There are at least two flaws
with this argument. First, the ’983 patent did not “invent” the claimed height-to-
radius ratio—it was disclosed in the prior art by both the Amicus® device and
the ’163 patent, as discussed above. Because that ratio was not an “inventive
feature[]” of the patent, there was no need for Baxter to have any special
43
“appreciation” of it. See Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052,
1063-64 (Fed. Cir. 2005).
Second, the fact that Smith’s documents do not specifically recite “a height
between 75 and 125% of the radius” also does not defeat prior invention. A
“document is not itself a conception, for conception occurs in the inventors’ minds,
not on paper. The draft simply corroborates the claim that they had formulated a
definite and permanent idea of the invention[] by the time it was prepared.”
Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1230 (Fed. Cir.
1994).10 Rather, “[t]he idea must be definite and permanent in the sense that it
involves a specific approach to the particular problem at hand” and “[i]t must also
be sufficiently precise that a skilled artisan could carry out the invention without
undue experimentation.” Id. at 1229-30. Here, indisputable documentary evidence,
as well as the undisputed testimony of Smith, Westberg, and Brown show, as a
matter of law, that Baxter had formulated the definite and specific idea of a
centrifugal unit of roughly the same height-to-radius ratio as the Amicus®, which
as admitted by Rochat and as shown in the ’163 patent, had a height-to-radius ratio
within the claimed range. Indeed, the objective of the Cygnet team was to create a
miniaturized version of the Amicus® centrifuge—the “Amicus® Junior”—for
10 Indeed, Haemonetics itself relied on this principle when it argued that Rochat’s April 20, 1998 document, which does not explicitly articulate “a height between 75 and 125% of the radius” (among many other elements, see supra n.9), nonetheless evidenced conception of claim 16. (See A3145; A6264.)
44
collection of 2RBC. Given this objective, the unrefuted documentary evidence
illustrating the elements of claim 16, and Richard Brown’s equations (which can be
used to determine any dimension of a separation chamber (A3453)), it is plain that
Baxter conceived claim 16 before Rochat.
2. Baxter Exercised Reasonable Diligence to Reduce the ALYX® System to Practice and, in Fact, Did Reduce the ALYX® System to Practice Eight Months Before Rochat Filed His Patent Application
An inventor may reduce an invention to practice by either (i) filing a patent
application (constructive reduction to practice), Hybritech Inc. v. Monoclonal
Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986), or (ii) constructing a
product embodying the claims and showing that the embodiment “actually worked
for its intended purpose,” Holmwood v. Sugavanam, 948 F.2d 1236, 1238 (Fed. Cir.
1991). Haemonetics conceded that Rochat did not reduce his device to practice
until he filed his patent application on April 9, 1999. (A3750.) Because, as
explained below, undisputed evidence shows that Baxter exercised reasonable
diligence to, and in fact did, reduce the ALYX® system to practice in August 1998,
the district court should have granted Fenwal JMOL of invalidity based on prior
invention.
At trial, Kelly Smith testified about Baxter’s efforts to actually reduce the
conceived ALYX® separation chamber to practice. Smith testified that Baxter
produced its first prototype by May 1998, based on the concept developed in early
45
April. (A3351-52; see also A6710.) She also testified that, in 1998 and 1999, she
“was 100 percent dedicated to the ALYX project” and that “in fact, all of [her]
time was spent developing the separation chamber and the separation process.”
(A3352.)
Baxter successfully tested an ALYX® prototype in August 1998. Smith
explained that, for a separation chamber to be feasible, it must demonstrate at least
80 hematocrit, meaning that at least 80% of the volume is red cells, and no more
than 20% of the volume is plasma. (Id.) Confirming the entries in her laboratory
notebook (A6419-20; A6425), Smith explained that, in a test with a prototype
chamber on August 26, 1998, the Cygnet team achieved 81% and 83% hematocrit
on two different samples. (A3353.) At this point, Baxter had demonstrated that
the ALYX® system “actually worked for its intended purpose,” Holmwood, 948
F.2d at 1238, and had as a matter of law reduced it to practice. Westberg
corroborated Smith’s testimony about the successful prototype test in August 1998.
(A3442.) Smith testified that, after the successful test, the Cygnet team “began to
focus on building an injection mold to produce these parts rather than using . . .
prototypes each time.” (A3354.)
Again, the district court gave no explanation in its JMOL order for why this
undisputed evidence did not establish Baxter’s prior invention as a matter of law.
Smith’s laboratory notebook and testimony, corroborated by Westberg,
46
unequivocally show that Baxter actually reduced the ALYX® system to practice in
August 1998, long before Rochat constructively reduced his purported invention to
practice in April 1999. Moreover, indisputable documentary evidence and
testimony show that Baxter conceived the ALYX® separation chamber no later
than April 8, 1998. And, in light of Kelly Smith’s full-time dedication to the
Cygnet team and Baxter’s eventual introduction of the ALYX® system, Baxter
exercised reasonable diligence to reduce its prior conception to practice. Claim 16
is invalid for anticipation by prior invention.
II. UNDER A PROPER CONSTRUCTION OF “CENTRIFUGAL UNIT,” THE ALYX® SYSTEM DOES NOT INFRINGE CLAIM 16; UNDER THE DISTRICT COURT’S CONSTRUCTION, THE CLAIM IS INVALID FOR INDEFINITENESS
A. The District Court Erred by Construing “Centrifugal Unit” to Have Two Different Meanings in the Same Claim
Before trial, Fenwal moved the court to construe various claims of the ’983
patent, including the term “centrifugal unit,” as it is used in independent claim 16
and its dependent claims 17-19. (A176-77; A194-98.) The construction of
“centrifugal unit” in claim 16 is critical because it affects the construction of the
dimensional limitations that are required of that “unit” and that appear at the end of
the claim.11
11 Of course, construction of “centrifugal unit” alone does not fully resolve
the matter because the court must also determine how to measure the “radius” and “height” of that “centrifugal unit.” See infra Part II.B. As the district court noted,
47
The parties agreed that “centrifugal unit” as used in claims 1-15 refers to the
vessel in which centrifugation occurs. (A11.) However, intrinsic evidence shows
that “centrifugal unit” as used in independent claim 16 refers to an assemblage
comprising the vessel and the tubing. Claim 16 begins by reciting “[a] centrifugal
unit comprising a centrifugal component and a plurality of tubes.” (A114.) The
parties agreed that the term “centrifugal component” refers to the vessel alone.
(A202.) If “centrifugal unit” also refers to the vessel alone, this construction
would disregard either the phrase “comprising a centrifugal component” or
“centrifugal unit,” contravening black-letter claim-construction law. See, e.g.,
Bicon, Inc. v. Straumann Co., 441 F.3d 945, 950 (Fed. Cir. 2006) (“[C]laims are
interpreted with an eye toward giving effect to all terms in the claim.”).
Likewise, the specification of the ’983 patent describes “a centrifugal unit
[that] includes a centrifugal component and a plurality of tubes.” (A111 (3:21-22);
see also A112 (5:1-5) (“[T]he mobile part that is to be discarded after each use
[consists] of three parts, cup or bowl 2, consisting of two parts 2a, 2b welded or
glued together and tubular component 9. . . . [T]his unit does not require any
impervious seal.”).) The text of the patent is clear that “centrifugal unit,” as used
(continued…) and as Haemonetics did not dispute, Fenwal’s accused ALYX® separation cup can be found to infringe only if “radius” and “height” are measured to the outermost points of the separation cup alone. (A3721.)
48
in claim 16 and its dependent claims, refers to an assemblage comprising the vessel
and the tubing.
Haemonetics, by contrast, initially stated that “centrifugal unit” in claim 16
is synonymous with the phrase “centrifugal device,” which refers to the overall
system. (A873-78.) But, likely realizing that the dimensional limitations of claim
16 do not read on the dimensions of the entire ALYX® device, Haemonetics
changed its position just days before the parties’ opening Markman briefs were due.
(A880-81.) Haemonetics at that point contended that the first usage of “centrifugal
unit” refers to “an assemblage of two elements, namely: (1) a centrifugal unit
comprising a centrifugal component, and (2) a plurality of tubes.” (A560
(emphasis omitted).) In other words, Haemonetics contended that the first usage of
“centrifugal unit” in claim 16 refers to the combined vessel and tubing, while the
second and third usages (the usages to which the “radius” and “height” limitations
refer) refer to the vessel alone. Haemonetics claimed that this was the result of a
drafting “error” (A923; A944), and conceded that this “inartful patent drafting”
resulted in its proffered construction being “an awkward reading” of the patent
claim. (A922.) Nevertheless, and notwithstanding the plain language of claim 16
defining “centrifugal unit” as including the assemblage of a vessel and tubing,
Haemonetics contended its interpretation (vessel alone) was required by the maxim
that a term should have the same meaning when used in multiple claims. (A560
49
(citing Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314 (Fed. Cir. 2003)).) Yet
Haemonetics had already conceded that “centrifugal unit” should have two
different meanings in the very same claim, and it offered no reason why the court
should construe the term consistently with independent claim 1, instead of
maintaining consistency within claim 16.
In its claim-construction ruling, the district court construed the first usage of
“centrifugal unit” to refer to a “combination of both the vessel and the tubing.”
(A12 (original emphasis).) As for the second and third usages, the court criticized
Haemonetics for “provid[ing] little or no explanation for why the same phrase,
‘centrifugal unit’, would be used to describe both the whole device (both the vessel
and the tubes) as well as merely the vessel component.” (Id.) Instead, the court
noted, “Haemonetics simply allows that ‘[u]nfortunately, in making this
amendment, the applicant failed to note that it was now using the same phrase,
centrifugal unit, to refer to two different concepts.’” (Id. (original emphasis and
alteration).) Nonetheless, the court agreed with Haemonetics and construed
“centrifugal unit” to refer to two distinct concepts in the very same claim. The
only reason the court offered for adopting Haemonetics’ concededly “awkward”
reading was its desire to avoid having the dimensional limitations of independent
claims 1 and 16 apply to different objects. (A13.)
50
Yet the maxim that a term should have the same meaning when used in
multiple claims does not apply when “it is clear from the specification and
prosecution history that the terms have different meanings at different portions of
the claims.” Wilson Sporting Goods Co. v. Hillerich & Bradsby Co., 442 F.3d
1322, 1328 (Fed. Cir. 2006). Here, as noted, the plain language of claim 16 shows
that “centrifugal unit” as used in that claim refers to the combined vessel and
tubing, unlike in claims 1-15.
It is also consistent with the specification to construe “centrifugal unit” to
refer to the combined vessel and tubing in independent claim 16, and the vessel
alone in other claims. For example, the Summary of the Invention begins by
describing one embodiment in which “centrifugal unit” appears to refer to the
vessel alone. (A110 (2:52-53) (“The centrifugal device includes a centrifugal unit
with a center and a rotation axis.”); see also, e.g., A111 (3:58) (referring to
“disposable rigid units,” i.e., the hard plastic cup).) The specification then goes on
to state that “[i]n accordance with another embodiment of the invention, a
centrifugal unit includes a centrifugal component and a plurality of tubes.” (A111
(3:20-22).)
Moreover, reading “centrifugal unit” to refer to the combined vessel and
tubing is consistent with the object of the invention as conceded by Haemonetics
and as reflected in the specification—to create an apheresis machine that is “small
51
and lightweight and that can readily be transported from one site to another to
allow use in mobile blood collection stations.” (A549; see also A111 (3:62-64)
(“[T]his device . . . facilitates its transportation by virtue of its reduction in terms
of weight and size . . . .”).) Indeed, the inventor himself testified that “to keep [the
tubing] as short as possible . . . is very, very important because . . . it is the main
dimension for the machine.” (A3146; accord A3149; A3195.) A claim “term can
be defined only in a way that comports with the instrument as a whole.” Markman,
517 U.S. at 389. In this case, a construction that focuses on the size of the entire
centrifuge assembly is obviously more pertinent to determining the size and
portability of the centrifuge machine than a construction that focuses solely on the
dimensions of the cup in which separation occurs, not accounting for the necessary
tubing.
Tellingly, during prosecution, Rochat had chances to fix the drafting “error”
that Haemonetics claims exists in claim 16. (See, e.g., A4853 (office action
instructing Rochat to review the claims to ensure they comply with 35 U.S.C.
§ 112 ¶ 2).) But Rochat left the claim as it was. The district court was wrong to
essentially redraft claim 16 to fix an alleged error when the inventor could have
changed the claim, but did not. See Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d
1371, 1374 (Fed. Cir. 2004) (“[W]e construe the claim as written, not as the
52
patentees wish they had written it.”).12 The district court’s construction of
“centrifugal unit” improperly creates an internal inconsistency in claim 16, see
Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335, 1345 (Fed. Cir. 1998)
(“The word ‘array’ is used repeatedly in the specification. Claim 16 itself uses the
word twice . . . . Thus, whatever interpretation we assign should encompass both
uses because the same word appearing in the same claim should be interpreted
consistently.”), defeats the public-notice function of the plain language of the
patent claims, see Mahn v. Harwood, 112 U.S. 354, 361 (1884), and should be
reversed.
There can be no dispute that the ALYX® system does not infringe claim 16
if “centrifugal unit” refers to any measurement besides the external outermost
dimensions of the separation cup alone. (See, e.g., A3203 (Haemonetics’ expert
testifying that the external outermost radius of the ALYX® cup alone is 49 mm);
A3721 (district court stating that “[t]o find infringement, the jury must, by
necessity, use the outermost dimensions” of the cup).) Under a proper construction
12 The district court distinguished Chef America on the ground that, in this case, the identical dimensional limitations in claims 1-15 suggest that Rochat meant “centrifugal unit” to refer to the vessel alone in claim 16, too, even if the plain language of claim 16 indicates otherwise. (A14.) But Chef America holds that the plain language of the claim at issue trumps all else, even if that plain language provides a “nonsensical” or awkward result. See 358 F.3d at 1373-74 (construing claim on batter-coated dough to require heating the dough itself (not the oven air) to a temperature range of 400° F. to 850° F., even though “the resultant product of such heating will be something that . . . resembles a charcoal briquet”).
53
of “centrifugal unit,” Fenwal is entitled to a judgment of noninfringement as a
matter of law.
B. As Interpreted by the District Court, Claim 16 Is Invalid for Indefiniteness
Even if the district court’s construction of “centrifugal unit” could be
sustained, claim 16 is invalid for indefiniteness. Under 35 U.S.C. § 112 ¶ 2, a
patent specification must “conclude with one or more claims particularly pointing
out and distinctly claiming the subject matter which the applicant regards as his
invention.” This Court has made clear that the purpose of the definiteness
requirement is to “assure[] that claims in a patent are sufficiently precise to permit
a potential competitor to determine whether or not he is infringing.” Amgen Inc. v.
Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1342 (Fed. Cir. 2003). In
determining whether a claim satisfies § 112 ¶ 2, the Court asks whether “one
skilled in the art would understand the bounds of the claim when read in light of
the specification.” Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371,
1375 (Fed. Cir. 2001). “If a claim is insolubly ambiguous, and no narrowing
construction can properly be adopted,” the claim is invalid for indefiniteness. Id.
At trial, both parties moved under Rule 50(a) for JMOL on the issue of
indefiniteness. (A3585-86; A3699-3700.) Fenwal argued that claim 16 was
indefinite because the terms “radius” and “height” could be measured at several
places, and the patent did not disclose which of those possible measurements was
54
correct. (A3699-3700.) Initially, the court denied both parties’ motions orally at
the charge conference. (A3721.) The court ruled that “[t]he evidence presented at
trial, if believed by the jury, was sufficient to support the . . . affirmative defense[],
but a reasonable jury could also conclude that the defendants did not meet their
burden of proving th[e] defense[].” (Id.) But the very next day the court sua
sponte reconsidered Haemonetics’ motion and granted it without providing any
reasoning, let alone a written opinion. (A3792.)
The district court was wrong to grant Haemonetics’ motion for JMOL on the
issue of indefiniteness. As shown above, the term “centrifugal unit,” as used in
claim 16, refers to the combined vessel and tubing. The radius and height
measurements should account for that tubing. But assuming arguendo that
“centrifugal unit” refers to the vessel alone, as the district court found, the
indefiniteness of the terms “radius” and “height” is clear. Indeed, the district court
never even tried to construe the terms “radius” and “height,” even though it
assured the parties at the pre-trial conference that there could be “further
construction at the time we send this to the jury.” (A2573.)
The patent and available extrinsic evidence provide no clear answer as to
where height and radius should be measured. On one hand, there is strong textual
and extrinsic evidence that one of skill in the art would understand “radius” and
“height” to refer to the interior dimensions of the vessel. On the other hand, the
55
jury found infringement based on the vessel’s exterior dimensions, as Haemonetics
urged. This conflicting evidence is discussed below and establishes the district
court’s error in granting Haemonetics JMOL on the issue of indefiniteness.
1. Evidence Suggesting Use of Interior Dimensions. The ’983 patent is
directed to “centrifuge systems for the general processing of fluids and, more
specifically, a centrifugal device for liquids, such as blood.” (A110 (1:13-15).)
When discussing the diameter and height of the separation cup, the specification of
the ’983 patent states:
Sizing of centrifugation cup or bowl 2 and of tubular component 9 forming the open loop is selected to permit reducing the overall dimension, weight, price and volume for this cup or bowl 2 as for the whole centrifugal device for which sizing is essentially dependent on the diameter of the centrifugation cup or bowl. If the diameter diminishes, speed must be increased. The speed increase can be limited by increasing the height of the centrifuge enclosure 3, so that the maximum flow remains practically constant, the latter being determined by obtaining a good sedimentation of the blood cells.
(A112-13 (6:66-7:9).) The italicized portions quoted above address “the physics of
the separation process,” as Richard Brown testified. (A3496-97.) Specifically,
changes in diameter and height affect the area of (and resulting g-force in) the
separation chamber, which is of course determined by the interior dimensions of
the separation chamber. (A3497.) If, for example, the interior diameter (and hence
separation chamber area) were reduced, under the equations developed by Brown,
either the rotational speed or interior height would have to be increased to maintain
56
component separation. (Id.) If the first italicized portion of the specification were
referring to a reduction in the exterior diameter of the vessel, there would be no
need to increase rotational speed or height as the specification states because
separation chamber area would remain unchanged.
The second italicized passage above reinforces this point. It refers
specifically to the height of the centrifuge enclosure 3. As shown in figure 2 of
the ’983 patent (below), centrifuge enclosure 3 is the internal area of the chamber
in which blood separation occurs.
(A107.)
Extrinsic evidence also suggests that a skilled artisan designing a centrifugal
separation chamber would understand the terms to refer to the chamber’s interior
dimensions. As noted, one skilled in the art would employ Brown’s equations just
57
like Rochat did (A3185) to determine which height and radius measurements and
rotational speed (among other characteristics) would create separation area and g-
force that would result in a functioning centrifuge. (See A7133.) As Rochat
admitted, Brown’s equations refer to blood flow, which depends on the internal
dimensions of the separation chamber, not the external dimensions. (A3160-61.)
It is only the circumferential length and height of the separation chamber at the
interface between RBCs and plasma that is relevant to calculating functional area.
(A3453.) Exterior dimensions have no predictive value and do not relate to
centrifuge functionality. (Id.) Brown and Smith confirmed that one of skill in the
art would measure the radius and the height of the chamber from its center to that
same interface. (A3346-47; A3453.)
The document Haemonetics pointed to as proof of Rochat’s “conception” of
the “1:1” height-to-radius ratio (A6264) confirms that Rochat used internal
dimensions in developing the ’983 patent. The document shows that Rochat
plugged different values of height and radius into an HR2 formula. Rochat
admitted at trial that this equation, which derives from Brown’s equations, relates
to principles of separation and the flow of blood—considerations that turn solely
on the internal dimensions of the separation chamber. (A3160-61.)
2. Evidence Suggesting Use of Exterior Dimensions. In contradiction
of the inventor himself, Haemonetics and its expert, Dr. Russell, contended that in
58
measuring the dimensions of the separation cup, the “external outermost
dimensions” of the cup must be used. (A3203; see also A3143; A3803-04; A3949-
51.) Specifically, Dr. Russell measured the radius of the ALYX® separation cup to
its outermost lip, even though that lip is solid and blood does not flow through it.
(A3209; see also A4363.) Likewise, in its opposition to Fenwal’s motion for
JMOL of noninfringement, Haemonetics claimed to find support in the
specification for an argument that “radius” and “height” should be measured to the
external outermost points. (A3948-49.) In particular, Haemonetics cited the
specification’s references to “overall dimension[s]” and the dimensions of the “cup
or bowl.” (Id.)
Setting aside the many flaws in Haemonetics’ argument for the use of
exterior dimensions, the argument shows that there are at least four places where
the “radius” recited in claim 16 could be measured, depending on the construction
of the similarly ambiguous term “centrifugal unit”: from the axis of rotation to
some point on the question-mark shaped tubing, from the axis of rotation to the
interface of blood separation in the separation chamber, from the axis of rotation to
the internal edge of the separation cup, and from the axis of rotation to the external
outmost point of the separation cup. Likewise, depending on the construction of
“centrifugal unit,” there are at least three places where the “height” could be
measured: from the stationary component 9a at the bottom of tubular component 9
59
to the top of the question-mark shaped tubing, from the interior base of the
separation chamber to the interior ceiling of the separation chamber, and from the
exterior bottom of the separation cup to the exterior top of the separation cup.
In light of this ambiguous evidence, the district court erred by granting
JMOL to Haemonetics on the issue of indefiniteness. The grant of JMOL to
Haemonetics should be reversed, and because claim 16 is insolubly ambiguous,
JMOL should be entered in Fenwal’s favor.
III. BECAUSE HAEMONETICS SOUGHT DAMAGES FOR FUTURE INFRINGEMENT, HAEMONETICS IS NOT ENTITLED TO AN INJUNCTION AGAINST THE ACCUSED DEVICE OR A PROVISIONAL ROYALTY
At trial, Haemonetics offered evidence on, and repeatedly argued for,
damages for future infringement of the ’983 patent. Having received an award of
over $15 million that included compensation for future sales, Haemonetics was not
also entitled to have those sales enjoined or to receive a provisional royalty.
In the pre-trial memorandum, Haemonetics explained that its damages
expert, Creighton Hoffman, would opine that Haemonetics was entitled to both
past and future infringement damages, with lost profits for 90% of Fenwal’s
disposable-unit sales and a royalty on the remaining 10%. (A1813.) During the
opening statement, Haemonetics’ counsel three times asserted to the jury that
Haemonetics “lost profits equal to about $35 million”: $22 million in past
damages and $13 million in future damages. (A3000-01; see also A2997.)
60
Hoffman then testified to the jury that “damages continue on after this trial” and
explained in detail how he calculated $13 million in future damages, which, when
combined with an estimated $22 million for past damages, yield “a total of about
$35.4 million in real damages to Haemonetics as a result of the alleged
infringement.” (A3423-24; see also A8942.) Again at closing, Haemonetics’
counsel called for future damages five more times, arguing that “Haemonetics has
lost $22 million. And if the thing stays on the market . . . – that will be up to the
judge if you find infringement – Haemonetics could lose altogether . . .
approximately $35 million.” (A3804; see also A3801; A3807-08.) Nothing in the
jury charge or the verdict form instructed the jury not to award the future damages
Haemonetics requested, as would have been necessary if damages were intended to
end on a date certain. (A87-104.) Rather, in the charge, the jury was told that it
may “assess damages beginning on [April 1, 2004]”—with no end date for future
damages. (A96.)13
13 While the verdict form asked the jury to state the amount of loss
Haemonetics “has suffered” as a result of the infringement (A104), Haemonetics cannot plausibly argue that the judge’s subtle choice of verb tense limited the jury to considering only past damages. This is especially true in view of (i) the repeated references to future damages at trial, (ii) the lack of an instruction limiting recovery to past damages, and (iii) the black-letter principle that “[i]t is . . . assumed, on appeal, that the jurors considered all of the duly admitted evidence,” 36 C.J.S. Federal Courts § 608 (2003). Indeed, when Haemonetics argued at trial for $35 million in damages, it, too, frequently used tenses referring to the past. (See, e.g., A2997 (“has lost”); A3000 (same); A3001 (“has suffered”); A3807 (“lost”).)
61
With over one-third of the damages requested by Haemonetics covering
future sales, the jury returned a verdict of over $15 million in lost profits and
royalties. Yet Haemonetics later obtained an injunction against future sales, along
with a 10% royalty on sales made before December 1, 2010. The law is clear that
Haemonetics may not obtain a second, irreconcilable remedy for the same injury.
Haemonetics’ arguments and the jury’s award should have led the district court to
deny the injunction on the ground that monetary relief was adequate, and that the
harm was not “irreparable.”
In Innogenetics, this Court reversed the grant of an injunction where the
jury’s award of a “market entry fee” compensated the patentee for “possible future
sales of [the] accused products.” 512 F.3d at 1379. As here, the jury charge in
Innogenetics authorized a reasonable royalty “starting from ‘just before the
infringement began’” and “[n]owhere did the jury instructions state the reasonable
royalty would be limited to a period from the start of infringement to the date of
judgment.” Id. at 1380. In addition, as here, the record in Innogenetics was
“replete with references to the market entry fee as an amount paid in anticipation
of [the infringer’s] long-term license to sell its products.” Id. As this Court
explained, “[w]hen a patentee requests and receives [future sales] compensation, it
cannot be heard to complain that it will be irreparably harmed by future sales.”
62
Id.14 Indeed, it is fundamentally unfair to permit “duplicative recovery for the
same wrong.” Wynfield Inns v. Edward LeRoux Group, Inc., 896 F.2d 483, 488
(11th Cir. 1990); accord ConnectU LLC v. Zuckerberg, 522 F.3d 82, 90 (1st Cir.
2008); 1 Dan B. Dobbs, Law of Remedies § 1.1 (2d ed. 1993) (plaintiff is entitled
to “[no] more than one complete compensation”).
For these reasons, the injunction, as well as the royalties on post-verdict
sales (including any post-judgment interest related thereto), should be vacated.
14 See also DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1307 (Fed. Cir.
2006) (“[T]he jury had before it evidence of price erosion. Accordingly, this court has no basis to speculate that the jury did not award price erosion damages as part of its lost profits or reasonable royalty analysis.”).
63
CONCLUSION
This Court should reverse the judgment of the district court and remand with
instructions to enter a judgment of invalidity and/or noninfringement for Fenwal.
Alternatively, the Court should vacate the judgment in favor of Haemonetics and
remand with instructions to conduct further proceedings—including a retrial where
appropriate—on the issues of invalidity and noninfringement. In all events, the
Court should vacate the permanent injunction and provisional royalty entered by
the district court.
Dated: November 9, 2009 Respectfully submitted,
____________________________________
GREGORY A. CASTANIAS LUKE A. SOBOTA PAUL R. GUGLIUZZA JONES DAY 51 Louisiana Avenue, N.W. Washington, D.C. 20001 (202) 879-3939 JOHN J. NORMILE JONES DAY 222 East 41st Street New York, NY 10017 (212) 326-3939 Attorneys for Defendants-Appellants
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United States District CourtDistrict of Massachusetts
________________________________
Haemonetics Corp., Plaintiff,
v.
Baxter Healthcare Corp. andFenwal, Inc.,
Defendants.________________________________
))))) Civil Action No.) 05-12572-NMG))))
MEMORANDUM & ORDER
GORTON, J.
In this patent infringement action, a jury returned a
verdict for the plaintiff, Haemonetics Corp. (“Haemonetics”), a
manufacturer of instruments and related equipment used to collect
blood and separate whole blood into its three main components
(plasma, platelets and red blood cells). Haemonetics now seeks a
permanent injunction prohibiting future infringement. It also
seeks an award for prejudgment interest.
I. Background
A. Facts
Haemonetics owns United States Patent No. 6,705,983
(hereinafter referred to as “the ‘983 patent”), which claims a
centrifugal device used for separating and collecting components
of liquids such as blood. In or around 2003, Baxter began
offering and selling a blood component collection system known as
the Alyx system, which includes an Alyx machine and a
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Prior to jury deliberations, the Court allowed1
Haemonetics’ motion for judgment as a matter of law on the issue
of claim indefiniteness which was, therefore, not submitted to
the jury.
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corresponding disposable kit comprising a centrifugal device.
Fenwal, Inc. (“Fenwal”) later acquired from Baxter its
transfusion therapies business, including the Alyx system.
B. Procedural History
Haemonetics filed suit on December 22, 2005, alleging that
the Baxter had infringed and continued to infringe the ‘983
patent by making and selling the Alyx centrifugal device. Baxter
asserted as affirmative defenses that the patent was invalid due
to 1) claim indefiniteness, 2) obviousness and 3) prior
invention.
The parties later assented to the joinder of Fenwal as a
party-defendant in the action. On September 16, 2008, this Court
allowed Fenwal’s motion for partial summary judgment of non-
infringement of certain claims of the ‘983 patent, leaving only
Claims 16 and 17 in dispute. Haemonetics opted to pursue only
its allegation of infringement of Claim 16 at trial, however.
Trial commenced on January 16, 2009, and two weeks later the
jury returned a verdict of about $15.7 million for Haemonetics,
finding that the ‘983 patent was valid (i.e., was non-obvious and
not anticipated by a prior invention) and had been literally
infringed by the defendants.1
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The injunction would not apply to Baxter because that2
company no longer manufactures the infringing device.
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On February 17, 2009, Haemonetics moved for a permanent
injunction against future infringement by Fenwal or, in the
alternative, a royalty on future sales of the Alyx. On March2
31, 2009, Haemonetics also moved for an award of prejudgment
interest at a rate of 12%. The defendants oppose both motions.
After the Court requested and received additional briefing
from the parties, an evidentiary hearing was held on the pending
motions on May 11, 2009. The Court considered testimony of
Timothy Costello (“Costello”), who is the Vice President of
Portfolio Lifecycle Management at Haemonetics, and Dr. Richard
Bergin (“Bergin”), Fenwal’s trial expert on damages. It also
heard oral argument and then took both motions under advisement.
C. Haemonetics’ Proposed Injunction and Royalty
Haemonetics seeks a permanent injunction:
1) to enjoin Fenwal from manufacturing or selling
a) any Alyx machines from the date of the entry of
the injunction; and
b) any Alyx disposable kits from 18 months after the
entry of the injunction or as soon as an
operational Haemonetics system is installed to
replace an Alyx system currently in use, whichever
occurs first; and
2) to require Fenwal
a) to notify any blood center currently using the
Alyx system of the injunction and of the
availability of replacement systems manufactured
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by Haemonetics;
b) to pay a 15% royalty on the gross sales revenue
from each Alyx disposable kit and ancillary
product (such as a cart or work station that
accommodates the Alyx) used to collect two units
of red blood cells that is sold after January 31,
2009, for use with an Alyx system installed at a
blood center prior to that date;
c) to pay a 20% royalty on the gross sales revenue
from each Alyx disposable kit and ancillary
product used to collect two units of red blood
cells that is sold after January 31, 2009, for use
with an Alyx system installed at a blood center
after that date;
d) to pay a 20% royalty on the gross sales revenue
from each Alyx disposable kit and ancillary
product used to collect i) plasma, ii) one unit of
red blood cells and one unit of plasma or iii) one
unit of red blood cells and one therapeutic dose
of plasma;
e) to provide Haemonetics with semi-annual statements
reciting the sales and related information with
respect to the Alyx products;
f) to allow Haemonetics to inspect Fenwal’s books,
records, documents and material related to its
royalty payments for at least four-and-one-half
years from the entry of the injunction; and
g) to pay post-judgment interest on all royalties
owed since January 31, 2009 through the entry of
the injunction at a rate of 0.49% in accordance
with 28 U.S.C. § 1961.
III. Legal Analysis
A. Permanent Injunction
1. Legal Standard
Following a finding of infringement, a patentee is entitled
to a permanent injunction against future infringement if it
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demonstrates:
(1) that it has suffered an irreparable injury; (2)
that remedies available at law, such as monetary
damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between
the plaintiff and defendant, a remedy in equity is
warranted; and (4) that the public interest would not
be disserved by a permanent injunction.
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).
2. Application
As described below, Haemonetics has satisfied all four eBay
factors and, thus, a permanent injunction will be entered against
Fenwal, although not exactly as proposed by Haemonetics.
a. Irreparable Injury and Inadequacy of RemediesAvailable at Law
Absent an injunction, Fenwal will continue to infringe the
‘983 patent by making and selling the Alyx system. Haemonetics
argues that Fenwal, as Haemonetics’ sole competitor in the market
for portable automated systems for collecting red blood cells,
will irreparably harm Haemonetics by capturing market share that
would otherwise belong to Haemonetics (if there were no Alyx).
See Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1328 (Fed. Cir.
2008); Amgen, Inc. v. F. Hoffman-La Roche Ltd., 581 F. Supp. 2d
160, 212 (D. Mass. 2008) (finding that allowing an infringer to
be a direct competitor would irreparably cause harm to the
patentee through “lost profits, market share, and good will”).
The defendants respond that Haemonetics has always held a
majority share in the market for automated red blood cell
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collection systems, even after the introduction of the Alyx, thus
suggesting that the continued presence of the Alyx would cause no
harm. That argument is unpersuasive, however, because the
continued presence of the Alyx would undeniably continue to take
up market share that would otherwise belong to Haemonetics and
would continue to deprive Haemonetics of profits.
In addition, the defendants suggest that this case is
distinguishable from Acumed and Amgen because, unlike the
patentees in those cases, Haemonetics 1) has actually gained
revenue since the launching of the Alyx through the resulting
expansion of the market for automated red blood cell collection,
2) already competes with Fenwal in the relevant market and 3)
does not practice the ‘983 patent. Those points are inapposite,
however, because Haemonetics’ injury stems, in fact, from the
loss of its “right to exclude competitors from infringing the
patent.” See Acumed, 551 F.3d at 1328. Money damages cannot
compensate for Haemonetics’ inability to assert that right. Id.
The fact that Haemonetics has asked for a royalty in the event
that an injunction is not entered does not preclude it from
seeking money damages in any event, despite the defendants’
argument to the contrary.
Finally, the defendants also allege that Haemonetics has
already been compensated for future damages because its expert
specifically explained his calculations for future lost profits
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to the jury and the Court’s instructions to the jury did not
limit recovery to past injury. Haemonetics responds that, in
fact, the jury instructions, as well as the verdict form, refer
to damages only in the past tense and make no reference to
compensation for future harm. Clearly, when it came time to
deliberate, the jury was led to consider only past harm and
Haemonetics is not “double-dipping” by seeking an injunction.
Thus, the first two eBay factors favor the entry of an
injunction.
b. Balance of the Hardships
Haemonetics contends that its potential losses absent an
injunction counterbalance any harm Fenwal would suffer if an
injunction were entered, particularly in light of the fact that
hardship incurred from merely ceasing operations is insufficient
to tilt the scale in Fenwal’s favor. See Smith & Nephew, Inc. v.
Synthes (U.S.A.), 466 F. Supp. 2d 978, 984 (W.D. Tenn. 2006).
The defendants respond that the cost of having to design around
the ‘983 patent would be very costly and thus cause them
tremendous hardship. That hardship, however, is also
insufficient to tip the scale. See Callaway Golf Co. v. Acushnet
Co., 585 F. Supp. 2d 600, 622 (D. Del. 2008) (“The court is not
in the business of making defendants’ infringements easier to
unravel.”). Accordingly, the third eBay factor does not weigh
against the entry of an injunction.
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c. Public Interest
Haemonetics asserts that the public interest is not
substantially implicated by the imposition of an injunction
because the Alyx system is used in only 4.5% of all red blood
cell collection procedures (according to Haemonetics,
approximately 850 Alyx Systems are currently in use at
approximately 40-50 blood centers in the United States and
Europe). Thus, without the Alyx, Haemonetics believes that the
blood supply would not be significantly disrupted. The
defendants respond that, because each Alyx collects two units of
red blood cells (as opposed to the one unit collected by the more
commonly used manual systems), it is actually responsible for
“almost 10%” of the country’s blood supply. Moreover, they
suggest that there is currently a shortage of red blood cells and
that eliminating 10% of the supply would severely and negatively
impact public health. Haemonetics contests that there is a blood
shortage.
The defendants also contend that an injunction would give
Haemonetics a monopoly over automated red blood cell collection
which could have potentially devastating consequences such as
supply failure in the event that Haemonetics’ one manufacturing
plant were to shutdown. That contention is unpersuasive. It
does not make sense to permit one wrong, i.e. infringement of the
‘983 patent, merely to avoid a different wrong, i.e. a monopoly
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in the market for the automated collection for red blood cells.
Moreover, as the defendants themselves argued at trial, manual
collection devices also compete with automated devices and
provide an alternative method for collecting red blood cells
(accounting, in fact, for over 90% of the overall red blood cell
collection). The defendants contend that they are also in the
process of designing a non-infringing version of the Alyx
separation cup that would compete with Haemonetics’ automated
devices. Thus, concerns about a monopoly are over-rated.
In addition, the defendants argue that forcing industry
participants to acquire and acclimate to new devices would cause
hardship to blood centers. Haemonetics concedes that such a
concern is well-taken but argues that the problem can be remedied
by a well-fashioned injunction. It recommends that an injunction
such as the one it proposes could establish an 18-month
transition period during which time Fenwal could continue to sell
Alyx disposable kits to current Alyx users. That would allow
those users to prepare for the impending discontinuance of the
sale of the kits by either planning to use manual collection
systems or installing replacement automated red blood cell
collection systems (such as Haemonetics’ MCS+8150 and Cymbal
products).
Haemonetics states that it is committed to providing
replacement machines for those Alyx machines currently in use at
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Haemonetics explains that it is common practice in the3
industry for manufacturers (such as the parties in this case) to
provide the blood centers with machines at no cost in
consideration for the purchase by the blood centers of the
manufacture’s disposable kits.
-10-
no cost to the blood centers. It also purports to provide3
customer support and training for the replacement machines and to
work with the blood centers in developing the requisite “standing
operating procedure” for the replacement machines as required by
the Food and Drug Administration.
Accordingly, Haemonetics’ proposed injunction would have
some impact on the public interest, and particularly on the blood
centers that currently use the Alyx, but that impact would
apparently be minimized. Thus, the public interest would not be
disserved by the entry of an injunction.
3. Other Objections of the Defendants to Haemonetics’Proposed Injunction
The defendants argue that Haemonetics’ proposed injunction
is impermissibly broad because it enjoins the “use” of the Alyx
system. They state correctly that this Court’s jurisdiction does
not extend to non-parties such as the blood centers using the
Alyx system. See Additive Controls & Measurement Sys., Inc. v.
Flowdata, Inc., 96 F.3d 1390, 1394 (Fed. Cir. 1996). The
defendants’ concern is unwarranted, however, because, although
Haemonetics’ supplemental brief refers to enjoining the “use” of
the Alyx system, its proposed injunction actually applies only to
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the actions of Fenwal and the Court does not intend for it to
apply to third parties.
In addition, the defendants object to Haemonetics’ proposed
injunction because it would provide Haemonetics with “free and
full access” to inspect Fenwal’s “books and records and all other
documents and material in Fenwal’s possession or control with
respect to the Royalty payments.” The defendants persuasively
argue that such access is unnecessarily intrusive.
To ensure Fenwal’s compliance with the injunction without
violating its right to corporate privacy, the permanent
injunction entered by the Court will provide for periodic
inspection by a third-party accountant. That accountant will not
have had any relationship (financial or otherwise) with either
party except that Haemonetics will bear the cost of its services
related to the injunction.
4. To What the Injunction Applies
Haemonetics requests that the injunction apply to the Alyx
disposable kits, which include the infringing centrifugal device,
and to the Alyx machines in which the disposable kits are used.
It alleges that the only use of the Alyx machine is to provide a
platform for the Alyx kit and so selling the machine is
tantamount to actively inducing infringement.
The defendants disagree. They assert that the Alyx machine
has not been found to infringe the ‘983 patent and that,
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therefore, its use should not be enjoined. Moreover, they
suggest that the machine could also be compatible with a
redesigned, non-infringing centrifugal device (and indeed they
claim that Fenwal expects to market such a device within 18
months). With that justification, an injunction against the
machine is not “necessary” to prevent future infringement. See
Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 777 (Fed. Cir. 1993)
(striking down an injunction that prohibited “activities that are
not necessary to prevent infringement of the patented process”).
The defendants’ argument is well-taken and the injunction will,
therefore, apply only to the Alyx disposable kits.
B. Royalty
1. Legal Standard
For those sales of the Alyx made after the jury verdict (and
before the injunction takes effect), The Court will award a
reasonable royalty to Haemonetics. Where, as here, there is no
established royalty for the sale of a product, a reasonable
royalty may be based upon “a hypothetical royalty resulting from
arm’s length negotiations between a willing licensor and a
willing licensee.” In re Cambridge Biotech Corp., 186 F.3d 1356,
1377 (Fed. Cir. 1999). In general “[t]he choice of methodology
for calculating damages is within the discretion of the district
court.” Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d
1364, 1370 (Fed. Cir. 2002).
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2. Application
a. Amount of the Royalty
Haemonetics suggests that its damages expert testified at
trial that 15% would be a reasonable royalty at trial based on a
hypothetical negotiation prior to a finding of infringement. It,
therefore, requests a royalty of 15% of gross sales revenue for
sales of Fenwal products used in connection with Alyx machines
that were installed in blood centers prior to the entry of the
verdict on January 31, 2009, and 20% for sales of Fenwal products
used in connection with Alyx machines after that date.
Haemonetics contends that the royalty may be different than
that awarded by the jury because “[o]nce a judgment of validity
and infringement has been entered ... different economic factors
are involved.” Amado v. Microsoft Corp., 517 F.3d 1353, 1362
(Fed. Cir. 2008). On behalf of Haemonetics, Mr. Costello
testified at the evidentiary hearing that post-verdict economic
factors, which were not presented to the jury, include Fenwal’s
current plans 1) to enter new markets previously unavailable to
it, i.e. red blood cell/plasma collection, red blood
cell/platelet collection, and plasma-only collection, and 2) to
increase its current market share (for the collection of two
units of red blood cells).
The defendants respond that 1) Haemonetics’ proposed 20%
“new market” royalty is based solely on the biased opinion of
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That computation is based on the fact that Haemonetics4
requested something over $22 million in lost profit damages and
was awarded something over $11 million or 50.8% to be exact
(assuming the jury awarded only pre-judgment damages). That
percentage of the requested royalty is 7.62%.
That amount is based on a model for calculating lost5
profit damages offered by Haemonetics’ expert at trial, using
30.8% in place of the 90% capture rate which appears in the
model.
-14-
Costello, a Haemonetics employee, and 2) the jury did not even
award Haemonetics the 15% royalty it requested. The defendants
contend in their memorandum in opposition to the pending motion
that, according to its expert, Dr. Bergin, the jury apparently
awarded a 7.62% royalty. At the hearing, Dr. Bergin presented4
an alternative methodology suggesting that the jury may have
awarded a royalty of exactly four percent (4%). Dr. Bergin5
suggested that a 4% royalty makes sense because that amount is
approximately double the royalty Haemonetics paid in connection
with the purchase of the ‘983 patent from its inventor.
As indicated by the equivocation of the defendants’ own
expert, it is difficult to decipher the royalty rate utilized by
the jury, particularly in light of the fact that it was
necessarily determined only from the evidence presented at trial
and the amount of damages requested. Furthermore, the defendants
contend, without legal authority, that the Court should
extrapolate a proper post-verdict royalty from the purported
royalty used by the jury.
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 14 of 19
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The defendants cite a transcript from a hearing in Finisar
Corp. v. DirectTV Group, Inc., No. 05-CV-00264, 2006 U.S. Dist.
LEXIS 76380 (E.D. Tex. July 7, 2006), held on July 6, 2006, in
which the court recognized that “we don’t know what the jury did”
and “the jury determined what’s in the past” whereas the Court
has to consider the future. Although the court in that case
considered the jury award, it ultimately rejected it as a basis
for determining a post-verdict royalty.
The defendants also cite Orion IP, LLC v. Mecedez-Benz USA,
LLC, No. 6:05-CV-322, slip op. (E.D. Tex. Mar. 28, 2008), where
the court determined that the royalty invoked by the jury was
close to that recommended by the plaintiff’s damages expert. The
court awarded that same royalty for post-verdict infringement
because the plaintiff failed to demonstrate why a higher royalty
should be warranted but that is not precedent for relying on the
jury’s findings in this case where certain distinguishable
factors warranting a higher post-verdict royalty exist.
Thus, rather than hypothesize about what royalty the jury
may have awarded Haemonetics, the Court will proceed to consider
the relevant factors set forth in Georgia-Pacific Corp. v. U.S.
Plywood-Champion Papers, Inc., 446 F.2d 295 (2d Cir. 1971), upon
which both Haemonetics’ damages expert at trial and defendants’
expert Dr. Bergin relied. First, it is notable that Haemonetics
did not license the ‘983 patent to anyone (regardless of whether
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 15 of 19
A40
-16-
it considered doing so), suggesting that it placed a high value
on the patent. Next, Haemonetics and Fenwal are direct and
nearly exclusive competitors in the market for red blood cell
collection. Fenwal’s use of the ‘983 patent thus prevents
Haemonetics from maintaining a monopoly on products covered by
that patent. Moreover, Fenwal has found the Alyx to be so
successful that it is expanding its use to markets other than for
the collection of two units of red blood cells (involving the
collection of plasma and platelets). All of those factors weigh
in favor of a higher royalty.
The 15% royalty sought by Haemonetics does, however, appear
to be excessive, especially considering that, 1) pursuant to its
purchase agreement, Haemonetics agreed to pay the inventor of the
‘983 patent a royalty of approximately two percent and 2)
Haemonetics itself has not used the patent. Accordingly, the
Court will award a royalty of ten percent (10%) to Haemonetics.
b. To What the Royalty Applies
Haemonetics requests that the Court require the payment of a
royalty for every infringing sale of an Alyx disposable kit and
“ancillary product” (including a cart and work station for the
Alyx system) made after the verdict. The defendants reject
Haemonetics’ proposed application of a royalty to “ancillary
products” because those products were not found to infringe the
‘983 patent. The Court will not impose a royalty on all products
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 16 of 19
A41
-17-
associated with the Alyx centrifugal device because it is
reasonable to assume that Fenwal will develop a non-infringing
device that works with the other non-infringing components of the
Alyx system. Accordingly, the royalty will apply only to sales
of the Alyx disposable kits.
Furthermore, the defendants contend that any royalty should
be calculated on the basis of “net sales,” which the defendants
suggest and the Court hereafter will define as gross sales less
returns, discounts and other price reductions, not on the basis
of gross sales as Haemonetics proposes. The defendants contend
that the gross sales figure bears no relation to the amount of
money Fenwal actually collects. That contention is reasonable
and, accordingly, the royalty will be calculated on the basis of
net sales.
c. Payment of the Royalty
Finally, the defendants request that any royalty payment be
held in escrow during the appeal of this case so that the award
may be remitted to Haemonetics if it prevails or returned to the
defendants if it does not. That request is also reasonable and
will be adopted. See Standard Havens Prods., Inc. v. Gencor
Indus., Inc., 897 F.2d 511, 516 (Fed. Cir. 1990).
C. Prejudgment Interest
Haemonetics has moved for an award of prejudgment interest
at a rate of 12% which is the statutory rate of interest for
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 17 of 19
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judgments in tort and contract actions in Massachusetts. See
M.G.L. c. 231, §§ 6B and 6C. The defendants do not dispute that
Haemonetics is entitled to an award of prejudgment interest but
object to an award at a rate of 12%. They point out that in
Bowers v. Baystate Techs., Inc., this Court awarded prejudgment
interest at a rate of 12% for breach of contract claims but at a
rate of “three-month U.S. treasury bills for the secondary
market” with respect to a patent infringement claim. 112 F.
Supp. 2d 185, 187-88 (D. Mass. 2000).
The Court finds no reason to depart from its previous
determination of an interest rate based on three-month Treasury
bills for the secondary market with respect to the pending patent
infringement claim. The defendants also persuasively assert that
an interest rate of 12% is excessive in light of the fact that
awards of prejudgment interest are meant “to compensate for the
delay in payment of the damages, and not to punish the
infringer.” Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056,
1066 (Fed. Cir. 1983).
The parties have stipulated that the infringing period began
on April 1, 2004. According to a Federal Reserve Statistical
Release, the three-month Treasury bill rate for the secondary
market had a mean of approximately five percent over the period
relevant to the instant award of prejudgment interest. See
Federal Reserve Statistical Release, available at
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 18 of 19
A43
-19-
http://www.federalreserve.gov/releases/h15/data/Monthly/H15_TB_M3
.txt. Accordingly, prejudgment interest will be awarded at a
rate of five percent (5%).
ORDER
In accordance with the foregoing:
1) The plaintiff’s motion for a permanent injunction
(Docket No. 291) is, with respect to the entry of an
injunction, ALLOWED but is otherwise DENIED. Theinjunction is set forth separately.
2) The plaintiff’s motion for an award of prejudgment
interest (Docket No. 315) is, with respect to the award
of prejudgment interest, ALLOWED but, with respect tothe rate of interest, is modified to provide for a
prejudgment interest rate of Five Percent (%5).
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated: June 1, 2009
Case 1:05-cv-12572-NMG Document 328 Filed 06/01/2009 Page 19 of 19
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United States District CourtDistrict of Massachusetts
________________________________
Haemonetics Corp., Plaintiff,
v.
Baxter Healthcare Corp. andFenwal, Inc.,
Defendants.________________________________
))))) Civil Action No.) 05-12572-NMG))))
PERMANENT INJUNCTION & PROVISIONAL ROYALTY
GORTON, J.
On January 30, 2009, a jury determined that the separation
cup used in Alyx System disposable kits manufactured by
defendants Baxter Healthcare Corp. and Fenwal, Inc. (“Fenwal”)
infringed Claim 16 of U.S. Patent No. 6,705,983 (“the ‘983
patent”) which is owned by plaintiff Haemonetics Corporation
(“Haemonetics”). Having considered the factors relevant to the
entry of permanent injunctive relief and royalty awards, and
having found such relief warranted, it is hereby ordered that:
1) commencing on and after December 1, 2010, Fenwal, its
officers, agents, servants, employees, attorneys and
all persons in active concert or participation
therewith are permanently enjoined from infringing, or
from inducing or contributing to the infringement of
the ‘983 patent by making, using, distributing,
offering to sell or selling the Alyx System disposable
kits (as embodied by Trial Exhibit 1240), or any other
blood component separation chamber that infringes the
‘983 patent;
2) commencing on and after July 1, 2009, Fenwal shall
distribute to each blood center or hospital which
previously had in place one or more Alyx System
Case 1:05-cv-12572-NMG Document 329 Filed 06/01/2009 Page 1 of 3
A45
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(hereinafter referred to as “Affected Blood Center”)
the notice attached as an exhibit to this order;
3) Fenwal shall pay to Haemonetics a provisional royalty
as follows:
a) Royalty: for each Alyx System disposable kit sold
on or after January 31, 2009, a royalty equal to
Ten Percent (10%) of Fenwal’s net sales revenue
(i.e. gross sales less returns, discounts and
other price reductions) from the sale of each such
product (“the Royalty”);
b) Schedule of Payments: the Royalty owed to
Haemonetics shall be calculated on a semi-annual
calendar basis (“the Royalty Period”) and shall be
payable, in United States currency except as
otherwise provided herein, no later than thirty
(30) days after the termination of the preceding
full semi-annual period commencing on the first
day of January and July;
c) Royalty Statements: for each Royalty Period,
regardless of whether any Alyx system disposable
kits were sold during that period or whether any
Royalty is owed, Fenwal shall provide Haemonetics
with a written royalty statement which shall
i) be certified as accurate by a duly authorized
officer of Fenwal and
ii) recite, for each Affected Blood Center, the
stock number, item, units sold, quantity
shipped, gross invoice, amount billed to
customers less discounts, allowances, returns
and reportable sales for each Alyx System
disposable kit;
d) Royalty Payments for Sales Outside the United
States: all Royalty payments owed to Haemonetics
based on sales in countries outside the United
States shall accrue in the currency of the country
in which the sales are made;
e) Record Inspection and Audit: for three years after
the entry of this order, an independent accountant
to be chosen and paid for but not associated with
Haemonetics shall have the right, upon reasonable
notice, to inspect Fenwal’s books and records and
Case 1:05-cv-12572-NMG Document 329 Filed 06/01/2009 Page 2 of 3
A46
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all other documents and materials in Fenwal’s
possession or control with respect to the Royalty
payments and shall, upon the request of
Haemonetics, prepare a report on the accuracy of
the Royalty Statements issued by Fenwal at
Fenwal’s expense;
4) in accordance with 28 U.S.C. § 1961, Fenwal shall pay
post-judgment interest on all royalties owing since
January 31, 2009, through the date of this order at a
rate of 0.52%;
5) this order shall be binding on all of Fenwal’s
successors and assigns; and
6) this Court shall retain jurisdiction to enforce the
provisions of this order.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated: June 1, 2009
Case 1:05-cv-12572-NMG Document 329 Filed 06/01/2009 Page 3 of 3
A47
-1-
United States District CourtDistrict of Massachusetts
________________________________
Haemonetics Corp., Plaintiff,
v.
Baxter Healthcare Corp. andFenwal, Inc.,
Defendants.________________________________
))))) Civil Action No.) 05-12572-NMG))))
MEMORANDUM & ORDER
GORTON, J.
In this patent infringement action, a jury returned a
verdict for the plaintiff, Haemonetics Corp. (“Haemonetics”), a
manufacturer of instruments and related equipment used to collect
whole blood and separate its into its three main components
(plasma, platelets and red blood cells). After trial, the Court
entered a permanent injunction enjoining defendant Fenwal, Inc.
(“Fenwal”) on or after December 1, 2010, from manufacturing or
selling the infringing device, the Alyx System disposable kit,
which is used in the collection of red blood cells.
As part of that injunction, Fenwal is required, on or after
July 1, 2009, to distribute a notice of the injunction (“the
Notice”) to each blood center or hospital which previously had in
place one or more Alyx Systems. In addition, the Court ordered
an award of prejudgment interest at a rate of five percent (5%)
based on the approximate mean of the three-month Treasury bill
Case 1:05-cv-12572-NMG Document 335 Filed 06/24/2009 Page 1 of 5
A48
-2-
rate for the secondary market. Fenwal has now moved to modify
the injunction with respect to its notice requirement and to
alter the order on prejudgment interest. Haemonetics has opposed
that motion.
I. Notice of Injunction
Prior to the entry of the permanent injunction, the only
objection Fenwal raised to the Notice proposed by Haemonetics
(and later adopted by the Court) was in a footnote in its
opposition to the injunction stating simply that 1) the parties
could make the necessary arrangement with customers without the
use of a court-ordered notice and 2) the Notice was “little more
than a court-endorsed advertisement” presumably because it
informs Alyx customers that Haemonetics will offer replacement
blood separation machines. Although cursory, the objection has
not been entirely waived as Haemonetics suggests.
Fenwal now offers a more detailed objection to the Court’s
requirement that it distribute the Notice. It argues that the
Notice is not necessary because Fenwal plans to introduce a
redesigned, noninfringing disposable kit for use with the
existing Alyx machines before December, 2010. It also argues
that the Notice may disrupt the market for the redesigned Alyx
disposable kit.
Because Fenwal cannot, of course, guarantee that a
redesigned, noninfringing disposable kit for the Alyx System will
Case 1:05-cv-12572-NMG Document 335 Filed 06/24/2009 Page 2 of 5
A49
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be on the market before December 1, 2010 (after which time it
will be enjoined from manufacturing or selling the infringing
device), the Notice is necessary to protect the public interest
in ensuring that there is no disruption in the collection of red
blood cells. The Notice will enable centers currently using the
Alyx System to prepare for the impending discontinuance of the
infringing disposable kit. Accordingly, the Notice requirement
will not be rescinded. It will, however, be modified to require
that Fenwal customers be informed that Fenwal is in the process
of developing a noninfringing, disposable kit for use with the
Alyx machines as a possible alternative to the use of a
Haemonetics system.
Fenwal objects to the Notice as currently drafted for two
additional reasons. First, it claims that the Notice is
inconsistent with the actual terms of the injunction entered by
the Court because it refers to enjoining the manufacture and sale
of the Alyx machines. This Court enjoined only the manufacture
and sale of the Alyx disposable kits. The reference to Alyx
machines was mistakenly included in the Notice and, accordingly,
will be omitted.
Second, Fenwal argues that paragraph 4 of the Notice
misleadingly implies that the Court has ordered the removal of
Alyx machines currently in use and the provision of replacement
machines by Haemonetics. That argument is also well-taken.
Case 1:05-cv-12572-NMG Document 335 Filed 06/24/2009 Page 3 of 5
A50
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Accordingly, the Notice will be further modified as set forth
separately.
II. Prejudgment Interest
The Court applied a prejudgment interest rate of five
percent (5%) under the mis-impression that the three-month
Treasury bill rate for the secondary market had a mean of
approximately that amount for the relevant period (April 1, 2004,
through the date of judgment). Fenwal correctly points out that,
in fact, that “mean” is 3.05% through the date of the verdict,
January 30, 2009.
The judgment in this case was entered on March 31, 2009.
The mean rate of interest for the three-month Treasury bill for
the secondary market calculated through that date is 2.96%.
Haemonetics’ motion for an award of prejudgment interest through
that date, originally opposed only with respect to the rate of
interest, will now, upon reconsideration, be allowed and
prejudgment interest will be awarded at a rate of 2.96%.
In its initial motion for an award of prejudgment interest,
Haemonetics requested that interest be calculated “per annum” and
Fenwal failed to oppose that request before the Court ruled on
the motion. Although Fenwal now seeks, as one alternative,
compound interest apportioned monthly based upon each month’s
infringing sales, the Court declines to entertain that late
objection and prejudgment interest will be awarded at the rate of
Case 1:05-cv-12572-NMG Document 335 Filed 06/24/2009 Page 4 of 5
A51
-5-
2.96% per annum (not compounded) from April 1, 2004 through the
date of judgment. The calculated interest is $2,321,494. An
amended judgment is set forth separately.
ORDER
In accordance with the foregoing, the defendant’s motion to
modify the permanent injunction and to alter or amend the order
on prejudgment interest (Docket No. 331) is, with respect to the
Notice as described above, ALLOWED but is otherwise DENIED.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated: June 24, 2009
Case 1:05-cv-12572-NMG Document 335 Filed 06/24/2009 Page 5 of 5
A52
Page 1
1 UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS
234 HAEMONETICS CORPORATION, )
Plaintiff, )5 )
)6 vs. ) CA No. 05-12572-NMG
)7 )
BAXTER HEALTHCARE CORPORATION )8 and FENWAL, INC., )
Defendants. )9
10BEFORE: THE HONORABLE NATHANIEL M. GORTON
1112
CHARGE CONFERENCE131415
John Joseph Moakley United States Courthouse16 Courtroom No. 4
One Courthouse Way17 Boston, MA 02210
Wednesday, January 28, 200918 11:13 a.m.192021 Cheryl Dahlstrom, RMR
Official Court Reporters22 John Joseph Moakley United States Courthouse
One Courthouse Way, Room 320923 Boston, MA 02210
Mechanical Steno - Transcript by Computer2425
A3720
2 (Pages 2 to 5)
Page 2
1 APPEARANCES:2 CESARI and McKENNA, LLP
By: Martin J. O'Donnell, Esq.3 88 Black Falcon Avenue
Boston, Massachusetts 022104 - and -
SHERIN & LODGEN5 By: Margaret H. Paget, Esq.
101 Federal Street6 Boston, Massachusetts 02110
On behalf of the Plaintiff.7
SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP8 By: Edward V. Filardi Esq.,
Daniel A. DeVito, Esq.,9 Stacey Cohen, Esq.,
Douglas R. Nemec, Esq.,10 James L. Leonard, Jr., Esq., and
Rachel Blitzer, Esq.11 Four Times Square
New York, New York 10036-652212 On behalf of the Defendants Baxter Healthcare Corporation
and Fenwal, Inc.13141516171819202122232425
Page 3
1 P R O C E E D I N G S2 THE COURT: Good morning, counsel. We are here on a3 charge conference. I first would like to have my deputy pass4 out the revised verdict form that we will get to before we5 adjourn today, but just to give you a little time. It's much6 simplified by virtue of the fact that some of the issues are no7 longer in the case that were before us up to this point.8 What I'm going to do at this stage -- and maybe I9 should start by just a comment that the motions have come fast10 and furious overnight. I have tried to consider them all11 carefully. But I must just say as a general matter that the12 motion practice in this case, as much as you both seem to like13 it, is over, and it is time to submit this case to the jury.14 So with that in mind, Haemonetics' motion for curative15 instructions with respect to evidence of noninfringing16 substitutes -- that's Docket No. 245 -- is denied. Defendants'17 counsel did not violate any order of this Court by eliciting18 testimony on existing alternative designs, and he did not19 improperly elicit testimony on hypothetical alternative20 designs. Moreover, defendants' counsel did not act improperly21 by cross-examining witnesses regarding their competence to22 offer testimony on patent law issues.23 Secondly, Haemonetics' motions for judgment as a24 matter of law on the issues of prior invention, obviousness,25 and claim indefiniteness, Docket Nos. 250, 251 and 252,
Page 4
1 respectively, and the defendants' corresponding cross-motions,2 Dockets 257, 256 and 255, respectively, are all denied.3 The evidence presented at trial, if believed by the4 jury, was sufficient to support the three affirmative defenses,5 but a reasonable jury could also conclude that the defendants6 did not meet their burden of proving those defenses.7 Third, Haemonetics' motion to strike all of Doctor8 Bergin's testimony, Docket No. 254, is denied. In his trial9 testimony, Doctor Bergin did not improperly apply an analysis10 of noninfringing substitutes, and his reasoning that lost11 profits should not be awarded pursuant to the demand12 requirements of Panduit was based on valid methodology.13 Before going forward, I have one sort of a14 housekeeping question for the defendants. The Court is15 currently planning to refer to both defendants jointly in its16 final instructions to the jury. Is there any reason that the17 Court should differentiate between the two?18 MR. FILARDI: No, your Honor. I think that will be19 accurate.20 THE COURT: All right. Now, we're going to -- well,21 just one comment with respect to the verdict form that I have22 passed out to counsel, the defendants requested that a special23 verdict question with respect to measurements of the ALYX be24 put to the jury, and I am not going to do that.25 To find infringement, the jurymust, by necessity, use
Page 5
1 the outermost dimensions of the ALYX; and, therefore, questions2 about measurements would be duplicative. Moreover, the3 defendants' proposed verdict form would allow for the4 possibility of an inconsistent verdict if, for example, the5 jury were to find that there is no infringement but, then, that6 the measurements are taken using the outermost dimensions. So7 I'm not going to do that as requested by the defendants.8 Now --9 MR. FILARDI: May our exception to that be noted, your10 Honor?11 THE COURT: Yes, your exception is noted.12 What I'm going to do next is go over the proposed jury13 instructions, first, of the plaintiffs. And I will go through14 them all and then allow for comment by, first, the plaintiff15 and then the defendants with respect to the proposed16 instructions -- proposed jury instructions. Then we'll do the17 same with respect to the defendants' proposed instructions, and18 we'll allow for comments by the defendants and then by the19 plaintiffs.20 I want to caution you right away, however, that when I21 say I'm going to give the substance of a proposed request that22 it means just that. It means "substance" unless I advise23 otherwise, that it's a verbatim -- in some cases, apparently --24 I think it was the defendants -- did a lot of research on my25 former charges. In some instances they hit it right on the
A3721
8-1
Page 1
1 UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS
234 HAEMONETICS CORPORATION, )
Plaintiff, )5 )
)6 vs. ) CA No. 05-12572-NMG
)7 )
BAXTER HEALTHCARE CORPORATION )8 and FENWAL, INC., )
Defendants. )9
10BEFORE: THE HONORABLE NATHANIEL M. GORTON
1112
DAY EIGHT OF JURY TRIAL131415
John Joseph Moakley United States Courthouse16 Courtroom No. 4
One Courthouse Way17 Boston, MA 02210
Thursday, January 29, 200918 9:48 a.m.192021 Cheryl Dahlstrom, RMR
Brenda Hancock, RMR, CRR22 Official Court Reporters
John Joseph Moakley United States Courthouse23 One Courthouse Way, Room 3209
Boston, MA 0221024 Mechanical Steno - Transcript by Computer25
A3791
8-2
2 (Pages 2 to 5)
Page 2
1 APPEARANCES:2 CESARI and McKENNA, LLP
By: Martin J. O'Donnell, Esq.3 88 Black Falcon Avenue
Boston, Massachusetts 022104 - and -
SHERIN&LODGEN5 By: James W. Matthews, Esq., and
Margaret H. Paget, Esq.6 101 Federal Street
Boston, Massachusetts 021107 On behalf of the Plaintiff.8 SKADDEN, ARPS, SLATE, MEAGHER&FLOM, LLP
By: Thomas J. Dougherty, Esq.9 One Beacon Street
Boston, Massachusetts 0210810 - and -
SKADDEN, ARPS, SLATE, MEAGHER&FLOM, LLP11 By: Edward V. Filardi Esq.,
Daniel A. DeVito, Esq.,12 Stacey Cohen, Esq.,
Douglas R. Nemec, Esq.,13 James L. Leonard, Jr., Esq., and
Rachel Blitzer, Esq.14 Four Times Square
NewYork, NewYork 10036-652215 On behalf of the Defendants Baxter Healthcare Corporation
and Fenwal, Inc.1617
I ND EX18
Closing Argument: Page19
by Mr. Filardi 520
by Mr. Matthews 3621
Charge to the Jury 6722232425
Page 3
1 P R O C E E D I N G S2 THE COURT: Good morning, counsel. I just wanted to3 say a few things to update you before we call the jury.4 With respect to Haemonetics' motion for judgment as a5 matter of law on the issue of claim indefiniteness -- that was6 Docket No. 252 -- the Court sua sponte has decided to7 reconsider that motion, and the motion is now allowed. And8 that issue will, therefore, not be given to the jury and will9 be removed from the verdict form.10 Second, Haemonetics' motion to strike the trial11 testimony of Doctor Robin Felder, Docket 268, is denied.12 We will now proceed with closings. Call the jury.13 MR. O'DONNELL: Your Honor, before the jury comes in,14 may we ask one thing?15 THE COURT: Yes.16 MR. O'DONNELL: Haemonetics has tried to simplify this17 case by not introducing evidence on claim 17 and willfulness,18 et cetera. We ask that there be no reference in the closing19 arguments to that simplification.20 THE COURT: Defendants have a response to that?21 MR. FILARDI: Your Honor, forgive me. I wasn't22 listening. We have to -- we have to modify some graphics.23 THE COURT: Mr. O'Donnell wants me to instruct you not24 to mention claim 17, which has been dropped from the case.25 MR. FILARDI: We will not do that.
Page 4
1 MR. O'DONNELL: Thank you.2 MR. FILARDI: But -- may we have just one moment?3 MR. DOUGHERTY: Your Honor, if you're going to proceed4 with closings now, we just need a moment then to conform the5 presentation.6 THE COURT: To do what?7 MR. DOUGHERTY: Just to be sure that the presentation8 does not reference what you just pointed out.9 THE COURT: By the "presentation," you mean the oral10 remarks of Mr. Filardi?11 MR. FILARDI: Yes, your Honor.12 MR. DOUGHERTY: Yes, and the reference to exhibits,13 yes.14 MR. FILARDI: I think I can simplify it, your Honor.15 I'll just make sure that Mr. Frank does not put up any charts16 that has indefiniteness. I think we can proceed, your Honor.17 THE COURT: Fine. All right.18 (The jury entered the room at 9:55 a.m.)19 THE COURT: Good morning, jurors. I hope you had a20 safe day away from the court in that snowstorm but we're back21 now, ready to complete this case.22 As I told you on -- when was it? -- Tuesday, the23 evidence was completed. So that leaves us now with closing24 arguments and my instructions on the law.25 By tradition, in civil cases, the defendants argue
Page 5
1 first, to be followed by the plaintiffs. So in this case, that2 means that Mr. Filardi, on behalf of the defendants, may make3 his closing argument.4 MR. FILARDI: Thank you, your Honor. Good morning,5 ladies and gentlemen. Let me begin by thanking you for your6 time. This is a -- I'm sure it's a very difficult thing for7 you, but the way our judicial system is set up -- and I'll8 explain that to you in a moment -- this issue of the9 infringement is not for the Patent Office. It's for a court10 and jury like yours. It might seem a little bit mind-boggling,11 but it's an amazing system that we have where a collective12 group of laypersons can delve into these technical issues. We13 thank you for your time. And, certainly, on behalf of Fenwal14 in this case, thank you for your time. Indulge us a little15 while longer.16 I told you in opening that there were three issues in17 this case, and that is: infringement, whether the patent is18 infringed; whether the patent is valid; and whether there are19 any damages. What we went through these past couple of weeks20 is you were hearing evidence. And I'm going to try to21 emphasize what the relevant evidence is to those three issues.22 You've heard, in our view, in Fenwal's view, evidence23 which is not relevant to this case. The respective size of the24 parties is not relevant, although, frankly, Fenwal, at this25 moment in time, is about as small a company as Haemonetics or
A3792
CERTIFICATE OF SERVICE
I hereby certify that on November 9, 2009, two bound copies of the
foregoing BRIEF OF DEFENDANTS-APPELLANTS were served by overnight
delivery on the following principal counsel:
Margaret H. Paget, Esq. Sherin and Lodgen LLP 101 Federal Street Boston, MA 02110
Attorney for Plaintiff-Appellee
______________________________ Paul R. Gugliuzza
Attorney for Defendants-Appellants
CERTIFICATE OF COMPLIANCE
1. This brief complies with the type-volume limitation of Federal Rule of
Appellate Procedure 32(a)(7)(B), because it contains 13,966 words, excluding the
parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii)
and Federal Circuit Rule 32(b).
2. This brief complies with the typeface requirements of Federal Rule of
Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of
Appellate Procedure 32(a)(6), because it has been prepared in a proportionally
spaced typeface using Microsoft Word 2003 in Times New Roman 14 point font.
Dated: November 9, 2009 ____________________________
Paul R. Gugliuzza Attorney for Defendants-Appellants