Opinion
No. 92 C 4803.
July 6, 1993
MEMORANDUM OPINION AND ORDER
*1 Both parties to this litigation have filed numerous motions for partial summary judgment in efforts to streamline the issues for trial. This Court will grant summary judgment on the issues presented only if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). To avert summary judgment, the party opposing the motion cannot merely rest on the pleading, but must present specific facts showing a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A genuine issue of material fact exists only where the dispute over facts might affect the outcome of the lawsuit and where there is sufficient evidence to support a jury verdict for the nonmoving party. Anderson, 477 U.S. at 248. All inferences will be drawn in favor of the nonmoving party on the respective issues. Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992).
Dr. Sakharam D. Mahurkar seeks partial summary judgment declaring that: 1) Bard's Hohn catheter falls within the scope of U.S. Patent No. 4,808,155 ("`155 patent"); 2) Bard's manufacture and sale of the Hickman I and II catheters infringe the Mahurkar `155 patent; and 3) Bard is not entitled to recover royalties paid on the Hickman I and II catheters prior to September 4, 1992, the date Bard filed its Answer challenging the validity of the Mahurkar `155 patent.
Bard seeks partial summary judgment declaring that: 1) Mahurkar is liable for breach of contract for wrongfully terminating the License Agreement; and 2) the Hohn and Hickman II catheters do not infringe. Bard also seeks a judgment dismissing all claims related to the Hohn catheter.
I. HOHN CATHETER A. Infringement
Bard seeks a declaration of noninfringement of the Hohn catheter. Bard also seeks a dismissal with prejudice of all claims related to the Hohn catheter. Mahurkar admits that it does not want an adjudication of infringement as to the Hohn catheter and, consequently, contends that summary judgment on this issue is "unnecessary." Yet, Mahurkar has not dismissed voluntarily this claim from his complaint. As far as Bard and this Court is concerned, the infringement claim is still pending. Accordingly, this Court will entertain Bard's motion for summary judgment on this issue.
Both parties agree that currently Bard is operating under a License Agreement to manufacture and sell the Hohn catheter. Mahurkar further admits that Bard is not delinquent in its royalty payments and that no determination of infringement regarding this catheter is sought. Although Mahurkar in effect has conceded noninfringement of the Hohn catheter, there is another reason why summary judgment in Bard's favor is proper.
In a letter dated February 26, 1993, Mahurkar's counsel stated the Mahurkar "has decided to reinstate Bard's license [for the Hohn catheter] on the condition that all past and future payments be made that are required by the License Agreement."
Infringement is the unauthorized use of a patented invention. 35 U.S.C. § 271. Use of a patent pursuant to a complete defense to an infringement action. De Forest Radio Tel. Tel. Co. v. United States, 273 U.S. 236, 242 (1927). This defense can be asserted by both express and implied licensees. Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684 (Fed. Cir. 1986) (licensee of implied license entitled to summary judgment on noninfringement). In this case, Mahurkar's reinstatement of the License Agreement and acceptance of all royalty payments due for past use of the patented invention released Bard for its past infringement and created an implied license retroactively effective as of the date of termination of the original express license. Shatterproof Glass Corp. v. Libbey-Owens-Ford Co., 482 F.2d 317, 321 (6th Cir. 1973). This renders Bard an implied licensee for the window period during which Mahurkar claims infringing use of its `155 patent. As an implied licensee for the window period and now as the holder of an express license, Bard is entitled to summary judgment on noninfringement as to the Hohn catheter.
Bard also seeks summary judgment on the liability portion of the third claim for relief in its counterclaim. This third claim for relief in Bard's counterclaim is a breach of contract claim arising from Mahurkar's termination of the License Agreement. Bard seeks "[a] declaration that the license agreement is in full force and effect, that Bard has complied with the provisions thereof, and that Mahurkar is not entitled to terminate said license." Both parties agree that now the License Agreement is in full force and effect and that Bard is not delinquent in its royalty payments from the Hohn catheter. This, however, does not resolve whether Mahurkar wrongfully terminated the License Agreement on July 29, 1992. A material issue of fact exists as to the timeliness of royalty payments on the Hohn catheter and infringement of the Hickman catheters. The reinstatement of the License Agreement does not obviate the need to resolve these issues. It only makes it difficult for Bard to prove damages if, in fact, it has manufactured and sold the Hohn and Hickman I and II catheters throughout the pendency of litigation, including the window period during which no License Agreement was technically in effect.
B. Patent Coverage
*2 Although Mahurkar does not seek a determination on infringement of the Hohn catheter, he does move for partial summary judgment declaring that the Hohn catheter is covered by the `155 patent. Bard argues that this motion for judgment on patent coverage amounts to nothing more than an improper request for an advisory opinion. This Court agrees. After adjudicating the infringement claim, no justiciable controversy regarding the Hohn catheter exists for this Court to resolve-a valid license agreement is in place and royalty payments are current. Spectronics Corp. v. H.B. Fuller Co., Inc., 940 F.2d 631, 635 (Fed. Cir. 1991) (a court's "exercise of judicial power under Article III depends at all times on the existence of a case or controversy . . . at all stages of review not merely at the time the complaint is filed").
Nevertheless, Mahurkar insists that a determination of patent coverage is warranted by the window period after the termination of the original License Agreement until its reinstatement, during which Bard made infringing use of the `155 patent. Mahurkar maintains that the reinstatement of the license did not extinguish the infringing use, but rather eliminated the claim for damages for Hohn catheter sales. Consequently, Mahurkar concludes the issue of patent coverage is still justiciable.
Mahurkar formally terminated the license on July 29, 1992 claiming that Bard breached the agreement by not filing timely reports and not making proper royalty payments. On March 15, 1993 Bard tendered the first check in satisfaction of the condition precedent to reinstating the License Agreement.
Mahurkar's argument ignores that Bard also raises an issue of standing to pursue the infringement claim. As Bard points out, when a plaintiff's standing is questioned, the relevant inquiry is whether, assuming justiciability of the claim, the plaintiff has shown an injury to himself that is likely to be redressed by a favorable decision. Absent such a showing, exercise of its power by a Federal Court would be gratuitous and thus, inconsistent with Art. III limitations.
Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38 (1976). Exercise of jurisdiction over the patent coverage issue here would be gratuitous. What Mahurkar seeks is only a determination that the Hohn catheter is covered by the Mahurkar `155 patent. Mahurkar neither claims any injury from nor seeks any redress for the period of Bard's infringing use. Essentially, the only utility this Court's judgment of coverage would have is prospective-it would facilitate and expedite a judgment of infringement in another court if, in the future, Bard manufactures and sells the Hohn catheter absent a License Agreement. This Court cannot render such an advisory opinion. Consequently, Mahurkar's motion for summary judgment on patent coverage of the Hohn catheter issue is denied.
II. HICKMAN I CATHETER
Mahurkar seeks partial summary judgment declaring that the Hickman I catheter infringes the Mahurkar `155 patent. The dispute here essentially concerns: 1) whether the Hickman I catheter is covered by the Mahurkar `155 patent; 2) whether, if covered, Bard had a right to use the `155 patent in applications such as the Hickman I; and 3) whether the `155 patent is invalid relieving Bard of liability for any infringing use.
*3 Mahurkar first argues that Bard has conceded that the Hickman I catheter falls within the scope of the `155 patent. Bard admits, inconspicuously in a footnote to its Memorandum in Opposition to Mahurkar's First Motion for Partial Summary Judgment, that the "Hickman I was only recently conceded to be within the scope of the claims." This presumably is a reference to its Local Rule 12(n) statement, in which Bard conditionally denies infringement:
1. Denied. Bard has admitted that the Hickman I catheter contains the elements of the claims 1-2, 4-5, and 7-12 of the `155 patent. Bard has not admitted infringement of any of the claims of the `155 patent, because it has challenged the validity of those claims. If the claims are held invalid, there can be no liability for infringement.
Stated another way, Bard has admitted infringement of the `155 patent if the patent is held valid. Although a finding of patent invalidity ultimately prevents liability for this infringing use, this possibility does not prevent this Court from giving Bard's admission legal effect and enter partial summary judgment on infringement conditioned on a finding of patent validity. It would seem to this Court that Bard's admission on the Hickman I's infringement renders this an open and shut issue. The only difficulty with summarily rendering summary judgment in Mahurkar's favor arises from both parties' briefs on the possible existence or non-existence of an implied license.
Mahurkar, after exposing Bard's admission of infringement, argues the existence of an implied license. Mahurkar essentially argues that Bard sold the Hickman I and II catheters under an implied license: 1) Bard management knew of the existence of the `155 patent shortly after it issued; 2) Bard made royalty payments on the Hickman catheters before the lawsuit; 3) Mahurkar accepted the royalties paid; 4) Bard knew that the sales of at least the Hickman I catheter constituted an infringement of the `155 patent; and 5) Bard received the tangible benefit of Mahurkar's forbearance from suit seeking injunction and damages. This argument seems patently inconsistent with his initial argument of infringement. In order to find infringement, not only must the Hickman I fall within the scope of the `155 patent, but its manufacture and sale must be unauthorized. If Bard operated under an implied license, it would constitute an authorized use of Mahurkar's `155 patent and, consequently, would be a complete defense to an infringement claim. Met-Coil, 803 F.2d at 687.
Bard almost instinctively assumes the role of the opposing advocate. Bard first questions whether a patentee can use offensively the theory of implied licenses to impose an unwanted license on an unwilling accused infringer. Assuming it's possible, Bard then argues that the existence of an express license, specifically authorizing only non-hemodialysis intravenous applications of Mahurkar's `155 patent and acknowledging Quinton's exclusive license for hemodialysis applications, precludes the imposition of an implied license here for use in hemodialysis catheters such as the Hickman I catheter. Gadsby v. Health Ins. Admin., Inc., 522 N.E.2d 865, 871 (Ill.App.Ct. 1988) ("Where an express contract dealing with the same subject matter exists, recovery on an implied contract theory is precluded.").
This Court recognizes the utility of such an argument. If this Court ultimately finds that Mahurkar's patent is invalid but an implied license exists, Bard is not entitled to recover the royalties paid prior to challenging the validity of the Mahurkar `155 patent. Troxel Mfg. Co. v. Schwinn Bicycle Co., 465 F.2d 1253, 1255 (6th Cir. 1972); Precision Shooting Equip. Co. v. Allen, 646 F.2d 313, 320 (7th Cir. 1981) (licensee not entitled to recover all royalties ever paid if patent held invalid). In fact, Mahurkar seeks a declaration that Bard is not entitled to recover royalties paid under this implied license from sales of the Hickman catheters prior to September 4, 1992 because (1) Bard accepted the principal benefit of the implied license and (2) a licensee has no right to recoup royalties paid under a patent prior to challenging the validity of the patent. On the other hand, if no implied license exists, Bard can recover the payments made under a mistake of fact. Bank of Naperville v. Catalano, 408 N.E.2d 441, 444 (Ill.App.Ct. 1980).
*4 The issue here is simply whether the License Agreement authorized Bard to sell the Hickman I catheter, a catheter which admittedly incorporates claims of the `155 patent and which is advertised and sold for use in both hemodialysis and plasmapheresis applications. Clearly, the License Agreement authorizes non-hemodialysis applications of the Mahurkar `155 patent. This authorization, along with the provision acknowledging that Quinton has an exclusive license in the area of hemodialysis applications, suggests that Bard is prohibited from using the patent in hemodialysis applications.
The present dispute arose because the Hickman catheters can be used in both hemodialysis and non-hemodialysis applications, and neither Bard nor the purchaser knows at the time of purchase to which use the particular catheter will be put. As Mahurkar points out, potentially every sale of the Hickman I is a licensed sale. Likewise, potentially every sale is also an unauthorized sale. Either way, one thing is clear-Bard loses. If it is a licensed sale, then Bard must pay royalties due. If it is an unauthorized sale, Bard is liable for infringement and must pay royalties due and cease manufacture and sale of the Hickman I catheter.
Nor is it likely that Mahurkar or Bard can restrict the purchaser's use of the Hickman I catheter absent the purchaser's knowledge of the restriction contained in the License Agreement. See Adams v. Burke, 84 U.S. 453, 456 (1873) ("when a patentee, or a person having his rights, sells a machine or instrument whose sole value is in its use, he receives the consideration for its use and he parts with the right to restrict that use . . . [and] it is open to use of the purchaser without further restriction on account of the monopoly of the patentees"); Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (7th Cir 1992) (patentee can use patent laws to enforce "Single Use Only" restriction against a purchaser of a product only if the restriction is a valid condition of the sale, i.e., a bargained-for-term of sale which does not violate some other law or policy).
Since the agreement does not expressly license the manufacture and sale of multi-purpose catheters, this Court must consider whether an implied license was created. It is a question of law whether the facts of record establish the existence of an implied license. Met-Coil, 803 F.2d at 687. Bard distinguishes between an implied license by legal estoppel and an implied license based on equitable estoppel. According to Bard, neither theory is applicable here. Essentially, by assuming this position, Bard concedes that it has no authority under the License Agreement or its penumbras to manufacture or sell the Hickman I catheter. This statement, along with the admission that the Hickman I catheter encompasses certain claims of the `155 patent, constitutes an admission of infringement to the extent the patent is valid. Despite these admissions of infringement, this Court ought to consider the issue of an implied license on the merits. The issue will be a point of contention if the patent is deemed invalid and Bard seeks to recover royalties attributable to the Hickman catheters.
Bard insists that an implied license by legal estoppel was not created because there was no subsequently arising patent right which, if asserted by Mahurkar, would prevent Bard from practicing the license first granted. Spindelfabrik Suessen-Schurr v. Schubert Salzer, 829 F.2d 1075, 1080 (Fed. Cir. 1987). Bard is correct that the situation here does not raise the question of whether a purchaser who buys a nonpatented product, designed for use in a patented process, receives an implied license to practice the process. The issue here is whether a licensee, with an express license to manufacture and sell the patented product for use in a specific process or application, receives an implied license to manufacture and sell the patented product for use in multiple processes which include, but are not limited to the designated application.
The License Agreement provides in pertinent part:
Licensee . . . wishes to obtain, and Licensor is willing to grant to Licensee, the non-exclusive, personal right to manufacture and sell dual lumen catheters covered by Licensor's patents for use solely for non-hemodialysis intravenous applications.
. . . .
I. DEFINITIONS. . . .
B. LICENSED PRODUCTS — Shall mean any dual lumen catheter that is covered by any claim of any of the patents and/or the patent applications in the Licensed Patent Rights and is designed and intended for use solely in non-hemodialysis intravenous applications.
. . . .
II. LICENSE GRANT. . . .
B. No license or right is granted by implication or otherwise with respect to any patent, patent application or other item of proprietary information of Licensor except as specifically set forth in the definition of Licensed Patent Rights. Specifically, Licensee is granted no right to manufacture or sell smooth bore dual lumen hemodialysis catheters covered by any of Licensor's United States Patents. . . .
C. Licensor has previously granted an exclusive license to Quinton Instrument Company on January 1, 1988 . . . in the field of hemodialysis catheters under United States Patent Nos. 4,134,402; 4,568,329; 4,583,968; 4,692,141; Des. 272,651 and various other patent applications and foreign counterparts to said patents. Licensee acknowledges the existence of that exclusive license.
(Emphasis added.)
*5 Under the circumstances, the common sense answer is no. To hold otherwise would render meaningless the License Agreement's express limitation to patent applications "designed and intended for use solely in non-hemodialysis intravenous applications," as well as Bard's acknowledgement of Quinton's exclusive license in the field of hemodialysis. The two-part test set out in Bandag also dictates a finding of no implied license by legal estoppel: 1) the Hickman I catheter has a noninfringing use (non-hemodialysis/plasmapheresis); and 2) the express limitation on applications and Bard's knowledge at the time of sale of Quinton's exclusive license in the area of hemodialysis "plainly indicate [] that the grant of a license" for use in hemodialysis applications should not be inferred. Bandag, Inc. v. Al Bolser's Tire Stores, Inc., 750 F.2d 903, 925 (Fed. Cir. 1984). Furthermore, this outcome is consistent with cases holding that an express notice of a license restriction at the time of sale precludes the grant of an implied license. See Met-Coil, 803 F.2d at 686-87 (distinguishing Radio Corp. of Am. v. Andrea, 90 F.2d 612, 615 (2d Cir. 1937), and General Elec. Co. v. Continental Lamp Works, Inc., 280 F.2d 846, 851 (2d Cir. 1922)).
The question still remains whether the parties' language or conduct created an implied license under the doctrine of equitable estoppel. Bard argues that the circumstances in this case do not trigger the doctrine of equitable estoppel: (1) Mahurkar did not induce Bard into erroneously believing that it was selling the Hickman catheters under its license with Mahurkar; and (2) Bard did not sell the Hickman catheters in reliance on any such alleged implied license. Bandag, 750 F.2d at 925. Alternatively, Bard argues that a disputed question of fact as to whether it paid royalties on the Hickman catheters because of a mistake of fact precludes summary judgment on the issue of its entitlement to recover these monies. Wilson v. Moore, 504 N.E.2d 1383, 1387 (Ill.App.Ct. 1987); Catalano, 408 N.E.2d at 444. Bard outlines a series of events, backed by affidavits, which support the inference that Bard managers were ignorant of the fact that it was paying royalties to Mahurkar on its sales of the Hickman catheters.
Bard contends that Mahurkar did not know of the existence of the Hickman catheters, much less that it was accepting royalty payments on the Hickman catheters until this dispute arose because Bard sent only cumulative reports without specifically identifying the product codes and names. Bard further maintains that it could not have believed the Hickman catheters were covered under the license because they were advertised and sold for use in plasmapheresis and hemodialysis-the license covered only non-hemodialysis applications.
Dr. Rosenthal left Bard after negotiating the License Agreement, but before giving the finance department instructions for implementing the License Agreement. The finance department therefore requested that the marketing department submit a list of the product code numbers of all dual lumen, staggered tip catheters. The Hickman catheters were included in the list. No one ever compared the list generated with the actual terms of the License Agreement. All royalty reports generated showed cumulative payments on a single line item without a product-by-product breakdown. Payments on the Hickman catheters were made from mid 1990 until early 1992. In March 1992, Bard set up a system to review periodically royalty payments by product code numbers. On about March 9, 1992, Michael Mazza (Mahurkar's co-counsel) sent a letter to Bard claiming that the sales of the Hickman catheters infringed the `155 patent and demanding that Bard cease and desist. The first set of royalty reports were circulated in March after receipt of the March 9, 1992 letter. After discovering the error, Bard stopped making royalty payments on the Hickman catheters.
Mahurkar rebuts claiming that the specific language in the License Agreement, requiring Bard to itemize payments according to the licensed products, entitles him to a presumption that Bard paid the monies "with full knowledge of the facts." Mahurkar cites no case to support such a presumption and presents no facts to rebut Bard's claim of ignorance. Instead, Mahurkar argues that an implied license exists because: (1) Mahurkar acquiesced in Bard's manufacture and sale of the Hickman catheters; and (2) Mahurkar accepted partial compensation for the Hickman catheters. 6 E. Lipscomb III, Lipscomb's Walker on Patents § 20:15, at 35-36 (3d ed. 1987) (" Lipscomb").
Mahurkar also contends that it was not a "unilateral, mistaken windfall payment" because he received the payments under a claim of right. A claim of right, however, depends on the validity of the patent and/or the existence of an express or implied license.
Mahurkar's argument is not responsive to the issues of Mahurkar's inducement and Bard's reliance raised on the question of implied license based on equitable estoppel. Rather, Mahurkar argues implied license by acquiescence. These two doctrines have some common denominators. In this case, the same reasons that prevent a finding of license by acquiescence prevent the finding of license by estoppel. This Court therefore will focus on the theory raised by the movant here.
A license by estoppel is created when: 1) there is infringement; 2) the patent owner has knowledge of infringement; 3) the patent owner engages in conduct that induces the infringer into believing that the patent owner has abandoned his patent or acquiesced in the infringement; and 4) the infringer relies on the patent owner's conduct. Lipscomb § 20:16; Bandag, 750 F.2d at 925 (the essential element for a license by estoppel is a party acting to his detriment in reliance on another's conduct).
*6 In quoting Lipscomb, Mahurkar left out some very important language. The sentence reads as follows:
And where the owner of a patent right acquiesces in the doings of one who makes, uses or sells specimens of the patented invention, and where that owner also accepts partial compensation for such doings, a license will be implied, unless the case also presents other facts which negative such an implication.
Id. (emphasis added). Here, the License Agreement's specific restriction to non-hemodialysis applications constitutes such evidence negating such an implication. Lipscomb § 20:13 at 31-32 (restrictions on express licenses to specific use or design are enforceable); Bela Seating Co. v. Poloron Products, Inc., 438 F.2d 733 (7th Cir. 1971) (same). In addition, Mahurkar has not presented a scintilla of evidence that he acquiesced in Bard's activities. The record indicates that on March 15, 1991 Mahurkar asked for a catalog of catheters corresponding to product codes in Bard's royalty reports. Bard responded by sending a copy of the Hohn brochure on July 22, 1991 stating that it was the only product sold under the Licensing Agreement. At the earliest, Mahurkar became aware that it was receiving royalties from the sale of catheters other than the Hohn catheter in July 1991, when he received a letter from Quinton complaining that Bard was selling a hemodialysis catheter. Still, Mahurkar has presented no facts establishing the exact date on which he learned of the Hickman catheters' existence. Mahurkar cannot acquiesce in activity of which he has no knowledge. Lipscomb § 20:15, at 36-37. Furthermore, such a finding of acquiescence is inconsistent with Mahurkar's March 9, 1992 letter, sent by Mahurkar's counsel Mazza, in which Mahurkar first notifies Bard of the Hickman catheters' infringement and requests that Bard "[p]lease immediately cease the further manufacture or sale of the Hickman catheter, and advise us in writing as soon as possible that this has been done."
There is sufficient evidence on this issue of implied license to support a jury verdict for Bard, the nonmoving party. Accordingly, this Court denies Mahurkar's motion for summary judgment declaring that Bard is not entitled to recover royalties paid on the Hickman catheters. In light of Bard's admissions, however, partial summary judgment on the issue of infringement of the Hickman I catheter is granted.
This ruling should not be interpreted as a grant of partial summary judgment on the nonexistence of an implied license. Bard has not sought such a judgment. Instead, Bard maintains that genuine issues of fact regarding the circumstances of the royalty payments preclude summary judgment on the issue.
III. HICKMAN II CATHETER
Both parties move for summary judgment on the issue of infringement of the Hickman II catheter. Infringement is established when the accused device, either literally or by equivalents, contains each element of an asserted claim. Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991). Both parties agree that the sole difference between the Hickman I catheter and the Hickman II catheter is the angled distal end of the return lumen, which can be produced by a two-step manufacturing process that first makes the tip of the Hickman I round and then cuts the septum. Bard describes the distal end of the Hickman II as a beveled, tapered, non-blunt tip and contends that the Hickman II catheter does not include: 1) the blunt distal end as required by all claims of the `155 patent; 2) the non-tapered distal end of claim 1; 3) the distal end portion of "substantially uniform cross section" of claim 7; and 4) the septum extending to the distal end in claims 2, 7, and 10. Bard also denies infringement because the "redesigned beveled, tapered, non-blunt tip of the Hickman II catheter functions differently than the Hickman I design."
*7 Mahurkar contends that the Hickman II catheter infringes the `155 patent both literally and under the doctrine of equivalents. Mahurkar argues that the Hickman II has a blunt end as defined and understood by one of ordinary skill in the art. Mahurkar also disputes that the Hickman II provides the functional advantages claimed.
A. Literal Infringement
The dispute here is basically one of claim interpretation. This Court must determine first the scope of the claims and then whether the properly interpreted claims encompass the Hickman II catheter. Patent specifications are the principal tools used for construing patent claims. Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985). A court also must consider references to drawings, the prosecution history, prior art, and the testimony of those skilled in the art. Arachnid, Inc. v. Medalist Mktg. Corp., 972 F.2d 1300, 1302 (Fed. Cir. 1992); Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 867 (Fed. Cir. 1985). Claims must be interpreted as one of ordinary skill in the art would interpret them. Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1571 (Fed. Cir. 1983). Both parties agree that one of ordinary skill in the art of catheter design possesses at least "education and/or practical experiences in the fields of medicine (specifically, nephrology), fluid dynamics, biocompatability and materials."
Judge Easterbrook, in MDL No. 853, likewise determined that one of ordinary skill in this area must "understand [] both the goals of hemodialysis, or some other use of catheters, and fluid dynamics, the needs of medicine, the tolerances of the body fluids to be exchanged, how the geometry of tubes and other shapes affects pressures, shears and turbulences." (Transcript of Proceedings, MDL No. 853, August 21, 1992, Exhibit J, at 1237-38.)
The parties devote a majority of their briefs to arguing over the definition of "blunt." Mahurkar maintains that "blunt" means simply "not sharp," without reference to a particular geometrical shape. On the other hand, Bard insists that "blunt," as used in the `155 patent and other Mahurkar patents, means a "flat" edge made by a cut normal or perpendicular to the longitudinal axis of the catheter.
Mahurkar attempts to classify the angled tip as an additional element which does not negate infringement. Mahurkar is correct that Bard cannot avoid literal infringement by merely adding an extra element or a function to the claimed invention. Mannesman Demag Corp. v. Engineered Metal Prods. Co., 793 F.2d 1279, 1282-83 (Fed. Cir. 1986) (addition of slag-stopping and backbone bars to cooling pipe coil did not preclude finding of infringement where coil retained all claimed elements and continued to function as a wall); R. Harmon, Patents and the Federal Circuit § 6.2(a)(ii), at 167 (2d ed. 1991) (addition of component, ingredient or step only precludes infringement if it produces a radically different system). Mahurkar, however, ignores that this rule applies only where the accused device already encompasses all the claimed elements. Id. The dispute in this case over the angled tip is not over an additional element, but over elements integral to Mahurkar's patent claims, i.e., a blunt, non-tapered distal end and a septum extending to the distal end.
With respect to the remaining elements, Bard contends that the VasCath Consent Judgment constitutes an admission by Mahurkar that a beveled, tapered catheter like the Hickman II does not infringe the `155 patent. The VasCath Consent Judgment was the product of infringement litigation concerning the SoftCell I and II catheters. The agreement enjoins VasCath from manufacturing and selling the SoftCell I catheter which had a blunt, squared-off distal end. It also obligates VasCath to pay royalties based on past sales of infringing catheters. Finally, it permits VasCath to manufacture and sell the SoftCell II catheters without any charge of infringement. The SoftCell II apparently has a distal end cut off on a bevel instead of at a right angle to the longitudinal axis, like the SoftCell I.
This Court will not give this Consent Judgment a more expansive effect than contemplated by the parties. There is no agreement that the SoftCell II catheter does not infringe. If anything, the Consent Judgment evidences an agreement to excuse any infringing use of Mahurkar's patent, much like a license implied from a patentee's acquiescence in an infringer's unpaid-for use. See Lipscomb's § 20:15, at 36-37. Accordingly, whether the Hickman II qualifies as a "tapered" catheter remains a disputed issue.
This Court must begin with the patent specifications and drawings. The `155 patent contains the following language:
In accordance with the invention, the tube 11 terminates with a blunt distal end 20 which is normal to the axis of the catheter 10. It does not have the conical tip or taper that is characteristic of other catheters. The absence of the conical tip avoids trauma and migration of the catheters into the tributaries of veins, e.g., the blunt ends prevents the end of the catheter from traumatizing or becoming caught in the walls of the blood vessels into which it is inserted. The intake lumen 14, on the other hand, preferably forms a bevel 21 at its distal end. Beyond the bevel 21 the divider 12 and half of the hollow tube 11 continue to the blunt distal end portion 20 of the return lumen 13.
(`155 patent, col. 3, lines 58-70) (emphasis added). Both parties have submitted deposition testimony and affidavits from qualified experts to support their construction of the term "blunt." The parties allegedly dispute which "experts" qualify as one of ordinary skill in the art of catheter design. However, given their experts' backgrounds and the conflicting testimonies, the parties' arguments are directed more aptly toward the experts' credibility.
*8 It is precisely the issue of credibility which prevents this Court from granting summary judgment on literal infringement of the Hickman II catheter. Resolution of the issue of literal infringement requires assessing the credibility of the expert witnesses and the weight to be accorded their testimony on the definition of "blunt." Such credibility determinations are inappropriate on motions for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Churchill v. Waters, 977 F.2d 1114, 1124 (7th Cir. 1992). It is also rudimentary that summary judgment is inappropriate when unresolved issues of fact prevent a court from properly construing the scope of a claim. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1364 (Fed. Cir. 1991); Howes v. Medical Components, Inc., 814 F.2d 638, 643, 646 (Fed. Cir. 1987) ("If complex scientific principles are involved or expert testimony is needed to explain a disputed term, for example, then an underlying factual question may arise which makes summary judgment improper.").
B. Doctrine of Equivalents
The question still remains whether the Hickman II infringes the `155 patent under the doctrine of equivalents. The U.S. Supreme Court explained the standard for equivalency in Graver Tank Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950).
"To temper unsparing logic and prevent an infringer from stealing the benefit of the invention" a patentee may invoke this doctrine [of equivalents] to proceed against the producer of a device "if it performs substantially the same function in substantially the same way to obtain the same result." The theory on which it is founded is that "if two devices do the same work in substantially the same way, and accomplish substantially the same result, they are the same, even though they differ in name, form, or shape." . . . [W]here a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat the patentee's action for infringement.
Id. at 608-09 (emphasis added).
Bard does not dispute that both the Hickman I and II catheters are chronic hemodialysis catheters, capable of surgical placement or percutaneous insertion with a sheath. Bard, however, claims that the Hickman II "functions" differently than the Hickman I because of the Hickman II's beveled taper. The differences Bard identifies are in the form of "functional advantages." According to Bard, the Hickman II catheter is: 1) less traumatic because it has less mass; 2) more easily advanced in the vasculature because it more easily avoids obstacles; 3) less likely to occlude either by clotting or by impingement upon the vessel wall because the beveled opening is larger; and 4) results in lower blood pressure at the point of infusion.
Despite Bard's protest, Mahurkar's comparison of the Hickman catheters is probative on the issue of infringement of the Hickman II. It is true that under the doctrine of equivalents, a court must "speak only of infringement of a claim and of an equivalent to a limitation of the claim." Read Corp. v. Portec, Inc., 970 F.2d 816, 822 n. 2 (Fed. Cir. 1992) (emphasis in original). Equivalency of limitations is still this Court's primary focus. However, nothing in Read specifically addresses the relevancy of such a comparison under the circumstances in this case. Here, the Hickman I has already been adjudicated to infringe the `155 patent. Bard now claims that the Hickman II resulted from modifications to the Hickman I and was manufactured and sold in reliance on a noninfringement opinion. Under the circumstances, such a comparison of structural and functional differences is probative of the scope and limitations of Mahurkar's patent claims. See Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1545 (Fed. Cir. 1987) (recognizing that such a comparison may be appropriate when the adjudicated device is a precise literal infringement of the claims). In any event, Bard itself has made similar comparisons in refuting infringement under the doctrine of equivalents. If this Court disregards arguments based on such comparisons, this Court would have no choice but to deny summarily both cross motions on this issue.
*9 Mahurkar offers its own affidavit and that of Dr. Ash and Mr. Luther in an attempt to expose the "technical fallacies" behind Bard's claims of functional advantages. He also offers the affidavits of Moorehead and DeCant attesting that the Hickman II performs equivalently to the Hickman I. Additionally, Mahurkar emphasizes that despite these claimed advantages, Bard did not retest the Hickman II catheter on either humans or animals.
Mahurkar also emphasizes that Bard did not file a separate 501(k) statement with the FDA. Although the actual filing is irrelevant because it is controlled by a different regulatory scheme, the fact that Bard did not retest the Hickman II catheter is probative of functional equivalence.
Equivalency is a question of fact. Graver, 339 U.S. at 609. Once again, resolution of the issue of infringement under the doctrine of equivalents hinges on the credibility of these experts regarding the "functional advantages" to the Hickman II catheter. Id. at 609-10 ("Like any other issue of fact, final determination requires a balancing of credibility, persuasiveness and weight of evidence. It is to be decided by the trial court."). Because there is a genuine issue of material fact as to whether the Hickman II functions in substantially the same way as the catheter claimed in the `155 patent (i.e., a blunt, non-tapered distal end with a septum extending to the distal end), this Court denies Mahurkar's motion for summary judgment on infringement of the Hickman II.
C. Prosecution History Estoppel
Bard argues that partial summary judgment on noninfringement of the Hickman II is still proper because Mahurkar is barred by the prior art and prosecution history from asserting the doctrine of equivalents as a basis for infringement of claims 1 and 7. The essence of this estoppel theory is that a patentee cannot recapture subject matter which he previously surrendered during patent prosecution to avoid prior art and obtain the patent. Read, 970 F.2d at 816. Clearly, not all amendments of claims during patent prosecution preclude a patentee from claiming infringement under the doctrine of equivalents. Mannesman Demag Corp. v. Engineered Metal Prods. Co., 793 F.2d 1279, 1284 (Fed. Cir. 1986). The issue here is whether, at any point during the prosecution of the `155 patent, Mahurkar limited his claims so as not to extend to the equivalents of non-tapered distal end catheters and catheters with distal end portions of substantially uniform cross section.
Prosecution history estoppel is irrelevant to literal infringement. Fromson, 720 F.2d at 1571.
Bard contends that Mahurkar made such a concession in prosecuting his `155 patent. Bard points to the examiner's rejection under 35 U.S.C. § 102(e) of Mahurkar's claims of utility application as being anticipated by Martin's U.S. Patent No. 4,451,252. Mahurkar subsequently amended claim 1 to require a non-tapered distal end and claim 7 to require a distal end portion of substantially uniform cross section. Bard argues that Mahurkar now is estopped from reclaiming coverage of catheters, like the Hickman II, having a tapered distal end or a distal end portion not of substantially uniform cross section. Furthermore, Bard insists that to read the patent more broadly would ensnare the prior art, i.e., catheters with beveled openings on the distal lumen and planar septums such as the Cournand catheters (claims 1 and 7) and the Tsuchida catheters (claim 10). Senmed, Inc. v. Richard-Allen Medical Indus. Inc., 888 F.2d 815, 821 (Fed. Cir. 1989) ("It is well established that limitations in a claim cannot be given a range of equivalents so wide as to cause the claim to encompass anything in prior art.").
Section 102(e) denies a person a patent if:
the invention was described in a patent granted on an application for patent by another filed in the United States before the invention thereof by the application for patent, or on an international application by another who has fulfilled the requirements of paragraphs (1), (2), and (4) of section 371(c) of this title before the invention thereof by the applicant for patent.35 U.S.C. § 102(e).
Claims 1 and 7 were amended, in pertinent part, to provide for:
1. . . . a tube having a non-conical and non-tapered distal end portion having a cross-sectional area smaller than the cross-sectional area of said proximal cylindrical portion, and said distal end portion extending from said second opening and terminating in a blunt distal end to prevent the distal end of the catheter from traumatizing or becoming caught in the walls of a [blood] vessel into which the catheter is inserted.
. . . .
7. . . . said tube having a distal end portion of substantially uniform cross-section and a cross-sectional area smaller than the cross-sectional area of said proximal cylindrical portion, said distal end portion extending from said second opening and terminating in [the distal end of said tube having] a blunt end to prevent the end of the catheter from traumatizing or becoming caught in the walls of a [blood] vessel into which the catheter is inserted, wherein said septum extends to said blunt distal end to comprise a portion of the peripheral wall of said distal end portion between said first and second openings.
(Emphasis indicates amended language.)
*10 The remarks portion to Mahurkar's amendment clearly establishes that the changes were intended to "clearly distinguish Martin." Mahurkar specifically notes, "Claim 1, for example, now recites that the elongated tube has a non-conical and non-tapered distal end portion. . . . The invention as now claimed does not have the tapered distal end of Martin." The difficulty with holding, as a matter of law, that Mahurkar cannot claim infringement by equivalents based on all tapered or non-substantially uniform cross-sectioned catheters is that this Court has yet to determine the meaning of "tapered" or "substantially uniform cross sections" in the context of Mahurkar's `155 patent. Indeed, the need to make a credibility judgment on the expert testimony presented on these issues precludes granting partial summary judgment on not only literal infringement, but on prosecution history estoppel as well.
Prosecution history estoppel does not impose a per se restraint on a patentee when he amends his claim following rejections on prior art. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1361-62 (Fed. Cir. 1991). The estoppel effect of such amendments to claim language depends on the particular prior art rejected and the reason for the change. Id. at 1361-62. Here, the prior art has been identified. The reason for the change, however, remains a fact question. Mannesman, 793 F.2d at 1285. A patentee is estopped from asserting the doctrine of equivalents only with respect to limiting language that constitutes a substantive change, i.e., limitations that clearly imply a change in coverage. Laitram, 952 F.2d at 1362. Given the contradicting expert testimony on the meaning of the critical amended language, a reasonable jury may find that the changes were merely clarifying or inherent limitations in the claims as originally issued, or it may find that the changes were actually substantive and narrowed coverage. In sum, the genuine dispute over the factual underpinnings of Mahurkar's claims renders partial summary judgment on noninfringement of the Hickman II catheter improper.
In Laitram, the `311 patent for high speed electro-optical printing using radiation sensitive material was issued to the inventor and assigned to Laitram Corp. A third party filed a request for reexamination. The examiner determined that there was a "substantial new question of patentability as to claims 1 and 2." The examiner subsequently rejected the claims under 35 U.S.C. § 103 for obviousness based on newly cited references. The examiner rejected claim 2 additionally under 35 U.S.C. § 102(b) as anticipated by one of the newly cited references. Laitram then amended these claims adding language such as "type quality," "at high speed," "rapidly reacting," and "in a single direction substantially perpendicular to said straight line." Laitram also filed a detailed analysis specifically distinguishing the `311 invention from the teachings of the references. The examiner allowed the claims as amended reasoning that the prior art failed to teach the invention as amended.
Laitram later filed an infringement suit against NEC. NEC filed a motion for summary judgment raising prosecution history estoppel. In opposition, Laitram submitted an engineer's declaration to show that the amendments "merely made explicit certain details that were inherent in those claims as originally granted." The declaration was uncontradicted. Still, the district court granted partial summary judgment in favor of NEC, finding that any amendment to overcome a rejection on prior art is substantive as a matter of law. The Federal Circuit reversed and remanded. The Federal Circuit found that the engineer's declaration effectively established a genuine and material disputed issue of fact regarding the meaning, origins, and significance of claim terms and left unresolved the issue of whether the amendment constituted a substantive change.
In Howes v. Medical Components, Inc., 814 F.2d 638 (Fed. Cir. 1987), the Federal Circuit reversed the district court's grant of summary judgment on noninfringement because there were "too many unresolved fact issues." As in the present case, Howes involved a patent for a multilumen catheter. The particular patent claim in issue had been amended during reissue to include the phrase "uniform outer diameter" in referring to the distal end portion of the catheter. The Federal Circuit found that this amendment did not estop the patentee from claiming that a catheter with a tapered distal tip infringed because the limitation was intended to distinguish the Cournand catheter on numerous grounds, including the fact that the non-uniformity in the Cournand catheter body begins halfway along the length of the catheter body.
IV. CONCLUSION
Bard is entitled to summary judgment on noninfringement as to the Hohn catheter. Bard, however, is not entitled to summary judgment on the liability portion of the third claim for relief in its counterclaim. Mahurkar's motion for summary judgment on patent coverage of the Hohn catheter issue is also denied.
As to the Hickman catheters, this Court denies Mahurkar's motion for summary judgment declaring that Bard is not entitled to recover royalties paid on the Hickman catheters. In light of Bard's admissions, partial summary judgment on the issue of infringement of the Hickman I catheter is granted. Adjudication of infringement on the Hickman II catheter, however, must await complete findings by a factfinder. The cross motions for partial summary judgment on infringement of the Hickman II catheters are denied.