Infringement Argument Contradicting Prosecution History and Based On Unreliable Expert Testimony Can Make The Case “Exceptional” Incurring Opponent’s Attorneys Fees
| January 11, 2012
MarcTec, LLC v. Johnson & Johnson and Cordis Corp.
January 3, 2012
Panel: Newman, Prost and O’Malley. Opinion by O’Malley.
Summary
The CAFC affirmed the district court’s award of attorney fees and expert fees under 35 U.S.C. § 285. During prosecution of the application, Applicant amended the claims to make clear that his invention required the application of heat to a heat-bondable material. Applicant also distinguished the surgical device from stents in order to obtain allowance. Patentee alleged infringement by accused stents having a coating sprayed at room temperature. Patentee further argued that accused product’s coating is, in fact, bonded by heat. In support of this position, Patentee offered expert testimony that spraying the coating at nearly the speed of sound would cause an increase in temperature such that heat is involved in bonding the coating to the stent. The expert testimony also alleged that heat is used in some of the manufacturing steps before the coating is sprayed onto the accused product. The court held that Patentee’s argument was baseless and frivolous and that Patentee acted in bad faith in bringing and pressing this suit.
CAFCは、米国特許法285条の例外的なケースとして相手方の弁護士費用と専門化証人の費用の支払いを命じた地裁の決定を維持した。問題の特許の審査過程において、出願人は、クレームを補正して、発明が熱を適用して結合する点で先行技術と異なることを主張し、また、本発明は、先行技術の血管を拡張するステントとは異なると主張した。この事件で特許権者は、常温でスプレーコーティングした被疑侵害者のステントを特許侵害で提訴した。そして、被疑侵害者のステントのコーティングにおいて熱が適用されていると主張した。特許権者の専門家証人は、音速に近いスプレーは温度上昇を伴うと主張し、また、スプレーコーティングの前に熱を使う工程があることもその根拠とした。裁判所は、特許権者の主張は根拠のない軽薄なものであり、不誠実なものであると判示した。
Details
A. Factual Background
1. Patent
a. The Claims at Issue
MarcTec alleged that Cordis infringed U.S. Patent 7,128,753, etc. Claim 1, the only independent claim of the ‘753 Patent, recites:
A surgical device for implantation in a body comprising:
an implant, at least a portion of which is expandable; and
a polymeric material bonded to the implant,
wherein the polymeric material is thermoplastic, includes a therapeutic agent, is non-flowable and non-adherent at room temperature, and becomes flowable, tacky, and adherent upon the application of heat.
The parties’ dispute focused, in large part, on the emphasized limitations and the proper construction of the term “bonded.” The specifications explain that the terms “bondable” or “bondable material” refer “to any material, suitable for use in surgical applications, which can be softened and made flowable by the application of heat, and which, when softened, will become tacky and bond to other materials and will flow to fill available space.”
b. The Prosecution History
During prosecution, the PTO rejected claims over U.S. Patent No. 5,102,417 (“the ‘417 Patent”). In response to the rejection, Applicant (Dr. Bonutti) explained that the ‘417 Patent teaches “an absorbable polymer coating placed upon wall surfaces of tubular shaped members,” and that Applicant claimed “implant includes a heat bondable material which is bonded to an implant by the application of heat.”
Applicant also distinguished the ‘417 Patent on grounds that it discloses “an expandable intraluminal vascular graft, or expandable prosthesis for a body passageway [such as blood vessels] …. Applicants, on the other hand, disclose, inter alia, an assembly for use in surgical applications in humans.”
2. The Cypher Stent
Cordis develops, manufactures, and sells products that are used to treat coronary artery disease, including the accused Cypher stent. The Cypher stent is a balloon expandable drug-eluting stent — “the same technology that Dr. Bonutti disclaimed to obtain allowance.” It is undisputed that the Cypher’s coating is sprayed onto the stent at room temperature and bonds to it at room temperature — not by the application of heat.
B. District Court
MarcTec filed suit against Cordis alleging that the Cypher stent infringes the ‘753 Patent, etc.
1. Claim Construction
During the Markman hearing, counsel for MarcTec instructed the court that it should focus on the claim language and look to the specification only if there is ambiguity in that language.
The district court rejected MarcTec’s attempts to minimize the role of the specification and prosecution history, noting Phillips. The court construed the term “bonded” to mean bonded by the application of heat.
Specifically, the court found that: (1) “heat bonding is the only form of bonding taught by the patent”; and (2) during prosecution, Dr. Bonutti limited his claims to heat bonding to overcome the Palmaz ‘417 Patent. Next, the court construed the terms “surgical device” (‘753 Patent) and “implant” (‘290 Patent) to exclude stents. The court further found that Dr. Bonutti “disclaimed stents during prosecution in order to obtain allowance.”
2. Summary Judgment of Non-infringement
MarcTec argued that Cypher’s coating is, in fact, bonded by heat. In support of this position, Marc-Tec offered expert testimony that spraying the drug/polymer coating onto the Cypher stent at nearly the speed of sound would cause an increase in temperature such that heat is involved in bonding the coating to the stent. MarcTec also pointed to evidence that heat is used in some of the manufacturing steps before the drug/polymer coating is sprayed onto the Cypher stent.
The district court granted Cordis’s motion for summary judgment of non-infringement with respect to all asserted claims of the patents-in-suit. In reaching this decision, the court relied on undisputed evidence that Cypher’s drug/polymer coating is sprayed onto the device at room temperature and bonds at room temperature.
The court excluded Marc-Tec’s expert testimony on grounds that it was unreliable and thus inadmissible. The court also found that use of heat at other stages of the Cypher’s process has no “bearing on whether the polymers are bonded to the device by the application of heat.”
As a separate and independent basis for granting summary judgment, the court found that MarcTec could not show infringement because: (1) it disclaimed stents during prosecution to overcome the ‘417 Palmaz Patent; and (2) the Cypher device is a stent.
The summary judgment was affirmed by the Federal Circuit in the prior appeal.
3. Motion for Attorney Fees and Expert Fees
After the district court granted summary judgment in its favor, Cordis moved to have MarcTec’s suit declared exceptional under 35 U.S.C. §285, and to be compensated for its reasonable attorney and expert witness fees.
The district court agreed with Cordis and declared this case exceptional under §285. Specifically, the court found that MarcTec’s allegations of infringement were “baseless” and “frivolous,” and that MarcTec acted in “bad faith” in bringing and maintaining this litigation.
Based on these findings, the district court awarded Cordis $3,873,865.01 in attorney fees and expenses under §285. In addition, pursuant to its inherent powers, the court awarded Cordis its expert fees in the amount of $809,788.02. MarcTec appealed.
Discussion
MarcTec argued that the district court: (1) applied the wrong standard in declaring this case exceptional under 35 U.S.C. §285; and (2) abused its discretion in awarding expert witness fees. For the reasons explained below, CAFC found no error in the district court’s decision and therefore affirmed the attorney and expert fees awarded.
A. The District Court Did Not Err in Awarding Attorney Fees Under §285.
For the reasons set forth below, MarcTec: (1) acted in bad faith in filing a baseless infringement action and continuing to pursue it despite no evidence of infringement; and (2) engaged in vexatious and unjustified litigation conduct that unnecessarily prolonged the proceedings and forced Cordis to incur substantial expenses.
1. Subjective Bad Faith & Objectively Baseless
MarcTec filed an objectively baseless lawsuit in bad faith. The district court specifically found that MarcTec’s allegations of infringement were “baseless” and “frivolous” and that it acted in “bad faith in bringing and pressing this suit when it had no basis for asserting infringement.”
The district court made several findings supporting its conclusion that MarcTec knew its allegations were baseless but pursued them anyway. Specifically, the court found that:
–Applicant amended his claims during patent prosecution to make clear that his invention required the application of heat to a heat-bondable material . . . Documents produced to MarcTec in discovery show that Cypher’s polymer/drug coating is applied and adheres at room temperature without the use of heat.
— Applicant argued to the PTO that the claims exclude stents in order to obtain allowance, MarcTec cannot turn around in litigation and assert the patents-in-suit against the Cypher stent.
— Even after MarcTec had documentary evidence establishing that heat-bonding is not used in the Cypher manufacturing process and Cordis was granted summary judgment on that ground, MarcTec pursued its frivolous action by relying on mischaracterizations of the claim construction adopted by this Court and expert testimony that did not meet the requirements for scientific reliability or relevance required by FRE 702 and Daubert.
Each of these findings supports the conclusion that MarcTec subjectively knew that it had no basis for asserting infringement and therefore pursued this litigation in bad faith. MarcTec cannot claim to be ignorant of the references to heat in the claims, the language in the specification discussing the importance of heat to the bonding process, or Dr. Bonutti’s statements to the PTO. MarcTec’s proposed claim construction, which ignored the entirety of the specification and the prosecution history, and thus was unsupported by the intrinsic record, was frivolous and supports a finding of bad faith.
B. The District Court Did Not Abuse its Discretion in Awarding Expert Fees.
The circumstances in this case justify the district court’s decision granting expert witness fees. This is particularly true given that: (1) Cordis was forced to incur expert witness expenses to rebut MarcTec’s unreliable and irrelevant expert testimony which was excluded under Daubert; and (2) the amount Cordis was required to expend on experts was not compensable under §285. Because MarcTec’s vexatious conduct and bad faith increased the cost of litigation in ways that are not compensated under §285, the CAFC found that the district court did not abuse its discretion in awarding expert fees to Cordis.
Conclusion
For the foregoing reasons, the CAFC affirmed the district court’s determination that this case is exceptional within the meaning of 35 U.S.C. §285, and its award of attorney fees and expert fees to Cordis in the amount of $4,683,653.03.
