The opinion of the court was delivered by: FRANK H. EASTERBROOK
EASTERBROOK, Circuit Judge.*Kidneys remove toxins from the blood. Kidney failure is fatal unless a way can be found to replace their function. Hemodialysis does this. Blood is removed from the body, toxins are removed from the blood, and the blood is then returned to the body. Sometimes a few days or weeks of hemodialysis is enough; in the interim the kidneys, having suffered an acute failure because of trauma or disease, return to normal functioning. Chronic kidney failure requires long-term hemodialysis, with the blood being cleansed several times a week. In either event, physicians need access to the blood stream without doing excessive damage to the circulatory system and the blood itself.
This patent litigation arises out of a dual-lumen catheter developed to provide that access. Earlier opinions describe the litigation. See Vas-Cath Inc. v. Mahurkar, 745 F. Supp. 517 (N.D. Ill. 1990), reversed in part, 935 F.2d 1555 (Fed. Cir. 1991); In re Mahurkar Double Lumen Hemodialysis Catheter Patent Litigation, 750 F. Supp. 330 (N.D. Ill. 1990), 781 F. Supp. 1295 (1991), 140 Bankr. 969 (1992). After a bench trial in the last of these consolidated actions, the others having been resolved by settlement, I now make the required findings of fact and conclusions of law.
Sakharam D. Mahurkar, a nephrologist, developed his first dual-lumen catheter in his kitchen in 1980, finishing the assembly on January 1, 1981. He has obtained a series of patents for that catheter and several variations, but the litigation has come to focus on No. 4,583,968, which issued on April 22, 1986. At the conclusion of the first phase of the bench trial, I informed the parties that in my view independent claims 1 and 19 of the '968 patent are valid and infringed by the devices IMPRA, Inc., has sold, and that dependent claims 2, 3, 6, 7, 8, 11, 20, 21, 22, and 23 also are valid and infringed by those catheters. Only one other patent, No. 4,692,141, issued on September 8, 1987, figures in Mahurkar's claims against IMPRA, and I concluded that I did not need to resolve certain issues concerning this patent in order either to decide liability or calculate damages. IMPRA informed me that it had taken its infringing dual-lumen catheters out of production, so I did not issue an injunction at the time. We proceeded to a trial on damages. This opinion elaborates on the oral decision on liability, addresses a few subjects that were not covered at trial, and reaches a conclusion on damages.
This litigation has been complex and extended, with disputes on hundreds of questions, central and tangential. In order to simplify this opinion, I confine my findings and conclusions to the issues that ultimately shape the decisions on the merits and relief. I assume familiarity with the earlier published opinions and do not recapitulate the nature of the devices and the background of the dispute. If the parties believe that some important factual or legal dispute still requires resolution, they should draw that issue to my attention promptly after receiving this opinion.
Mahurkar charges IMPRA with infringing his patents. On this question Mahurkar bears the burden of persuasion, In re Hayes Microcomputer Products, Inc., Patent Litigation, 982 F.2d 1527, 1541 (Fed. Cir. 1992), so I start here. The trial was structured in much the same fashion. See Howard T. Markey, On Simplifying Patent Trials, 116E F.R.D.F 369 (1987); Rita Mankovich Irani, The New Skirmish In Patent Cases: Who Goes First at Trial and With What Evidence?, 17 AIPLA Q.J. 364 (1989).
The '968 patent covers a smooth bore, dual-lumen catheter, and there is no doubt that IMPRA made such a catheter, all but identical to the one described in the '968 patent. Figures 1 and 2 (Figures 6 and 7 from the '968 patent) show the cross-section and tip of Mahurkar's device, and Figure 3 shows IMPRA's.
After the extended pretrial proceedings, and the admissions of the parties, resolved many disputes, the essential question concerning infringement came down to a disagreement about the meaning of language in the '968 patent concerning the septum. The septum is the divider between the lumens (that is, the tubes) of the catheter.
Claim 1 of the '968 patent describes a device including a "longitudinal planar septum . . . said first lumen and the internal wall thereof formed by said septum extending continuously through said conical tapered tip". Claim 19 uses this variation: "integral septum extending axially along the entire length of the tube". IMPRA contends that its catheter does not have such a septum, for reasons related to the manner of its construction.
IMPRA made its catheters by extruding plastic tubing in a double-D configuration and inserting one end of the tube into a heated die. The die was shaped like an inverted cone, so that the catheter acquired a taper, and the die had a protrusion called a mandrel. The mandrel kept a circular hole open in the return lumen of the tube so that the catheter could be inserted into the patient's circulatory system over a guidewire (the Seldinger technique) and so that blood would pass through this opening while the catheter was in use. Using a die with mandrel to form the conic, tapered tip meant that the dividing wall between the double-D tubing was melted and pushed to the outer wall. This simultaneously closed off the intake lumen and produced a thickening of one side of the wall of the tip.
The parties have had some dispute about the precise construction and shape of IMPRA's device. To tie up loose ends, I find that Figure 3 (MMDL 327) is an accurate rendering of IMPRA's device. It is taken from a diagram attached to the narrative statement of Gary Smith, one of IMPRA's experts. Figure 3 shows two deflections of the septum: one drawn by IMPRA's in-house staff, and another closer to the tip penciled in by Smith. Glen Harding, IMPRA's current engineering supervisor, confirmed that the Smith alterations to this drawing are accurate. Tr. 736-37. I find that Smith's correction depicts the tip. The hand-drawn nature of this drawing makes it hard to say exactly where the deflection begins, but it is less than 0.188 inch, the location of the deflection in the drawing before Smith made his correction. A photograph in the record (MMDL 441) shows the deflection at the very tip. Variations attributable to differing methods of construction do not affect my conclusions, so I do not include other figures.
Although IMPRA's arguments have some semantic attraction, they are ultimately inconsistent with the terms of the patent. Both the full text of claims 1 and 19, and the diagrams illustrating the invention, call for a conversion to a conic section at the tip. The preferred embodiment of the invention has the apex of this cone on the axis of the tube, and the opening in the conic tip is in the shape of a circle rather than a D, in order to facilitate insertion by the Seldinger technique. The apex of the cone can be on the axis of the tube only if the septum is moved out of the way at the tip, and the transformation from D-shape to O-shape is possible only if at least some portion of the septum (or what used to be the septum) is curved. In other words, the invention claimed and described in the patent has exactly the deflection that IMPRA's device does. "Continuous" and "planar" thus describe the construction of the septum until the tip, but not at the tip. IMPRA's device literally infringes.
A second set of considerations supports the same conclusion. Figure 2 (Fig. 7 of the '968 patent) shows that the intake lumen of the Mahurkar catheter is sealed off below the intake ports and replaced with a plug of plastic, which the claims of the patent call a "relative concentration of material". (This both stiffens the tip and eliminates space in which blood may pool and clot.) Below the intake ports in the '968 device there is only one "lumen" through which blood flows. Yet the claims speak without embarrassment of a septum extending through the tip. If there cannot be a "septum" without two lumens, then the septum in the catheter described by claims 1 and 19 of the '968 patent must end at the intake ports. That would make the patent internally contradictory. Far better, I believe, to read the claim language so that the word "septum" as used in the patent refers both to the divider between lumens (when there are two lumens) and the wall formed by the extension of that divider along the longer (return) lumen after the intake lumen ends. This is precisely how claim 1 puts it: "the internal wail thereof formed by said septum". The septum forms an internal wall at the tip in the patent claims and in IMPRA's catheter, so again IMPRA's device literally infringes. A device need not be identical to trigger literal infringement. In patent law, as in horseshoes, close enough counts. Read Corp. v. Portec, Inc., 970 F.2d 816, 823 (Fed. Cir. 1992).
Interpretation of language in patent claims is an issue of law, Read, 970 F.2d at 822, and the question whether a device literally infringes the claim as construed is one of fact. Hayes Microcomputer Products, 982 F.2d at 1541. Claim construction plays the leading role in today's case, but judges should not pretend that all nominally "legal" issues may be resolved without reference to facts. It would be folly to suppose that the two prior paragraphs capture the only possible understanding of the language in the '968 patent. Claims 1 and 19 are not self-defining. What seems clear to a judge may read otherwise to a skilled designer. That is why we had a trial. Mahurkar offered three principal expert witnesses: himself, Dr. Stephen R. Ash, and Ronald B. Luther. All three have designed catheters and hold patents for several designs; Drs. Mahurkar and Ash have used these catheters in their patients. All three of these skilled designers accorded the language in claims 1 and 19 the meaning I have ascribed to it. IMPRA also offered experts: principally its president Harold Green plus Gary P. Smith, a chemical engineer. Neither Green nor Smith is a physician or catheter designer. As it turned out, Smith essentially conceded that IMPRA's device literally infringes claim 1 of the '968 patent. Tr. 922-26. To the extent the testimony of Mahurkar's experts disagrees with that of IMPRA's, I have generally accepted Mahurkar's--not so much because of a difference in credibility as because of a difference in expertise. Mahurkar's experts know the relevant field better, making their views more reliable even after the generous discount I have applied on account of their status as hired guns (and, in Mahurkar's case, as a party).
Mahurkar, Ash, and Luther testified that no functional difference is attributable to the last-centimeter deflection of the septum into the outer wall of IMPRA's catheter. Smith agreed. Tr. 961-62. I accept these conclusions, which means that IMPRA's device also infringes the '968 patent by the doctrine of equivalents. IMPRA tries to avoid this conclusion by pointing to the prosecution history of the patent, but that effort is unavailing. Claim 19 was not amended in any way material to this case in the course of prosecution, so it cannot be narrowed by its prosecution history. Claim 1 was amended by adding the language about the continuous planar septum, but for reasons I have already given this does not matter to our case.
What IMPRA principally relies on to avoid infringement by equivalents is a single sentence in a letter Mahurkar's lawyer sent to the patent examiner distinguishing the Martin patent No. 4,451,252 on the basis of its tip construction. Richard Auchterlonie, then representing Mahurkar, wrote: "In Martin 4,451,252 the septum is deformed at its proximal end and joins the outer wall to close off the second lumen." Having avoided Martin by distinguishing the '252 tip, IMPRA insists, Mahurkar may not contend that IMPRA's catheter infringes by equivalents. Not so, and for two reasons:
First, what ultimately persuaded Examiner Truluck that Mahurkar's catheter was patentable over Martin was that Mahurkar's Invention predated Martin's application. Mahurkar filed a Rule 131 affidavit, with photographs, showing the devices cobbled together in his kitchen. Martin's application after the date Mahurkar reduced his invention to practice became of no further moment, and accordingly cannot be used to restrict the scope of the claims in the '968 patent. Sun Studs, Inc. v. ATA Equipment Leasing, Inc., 872 F.2d 978, 983-84 (Fed. Cir. 1989).
Second, the tip of the Martin '252 device is so completely different from the tip of the Mahurkar '968 device and the IMPRA device that the sentence distinguishing Martin on the basis of tip construction does not narrow claims 1 and 19 in any way material to IMPRA's device. Distinguishing a prior reference does not estop the applicant on each element, but only on the distinguished elements in combination. Read, 970 F.2d at 824. Both the '968 catheter and IMPRA's catheter close the intake lumen at or near the intake ports, have a long portion of the return lumen downstream of the intake ports, have a taper with a conic section, and come to a circular return port at the tip. The Martin '252 patent shows a mandrel and die being used to pinch off the intake lumen at the tip, a method utterly different from Mahurkar's, and IMPRA's. See Figure 4.
Saying, as Mahurkar did, that the Martin '252 device is materially different is true, and of no aid to IMPRA, whose device is almost exactly like Mahurkar's and has much less in common with Martin's. "Depending on the nature and purpose of an amendment, it may have a limiting effect within a spectrum ranging from great to small to zero." Hughes Aircraft Co. v. United States, 717 F.2d 1351, 1363 (Fed. Cir. 1983). In a suit against Martin, the effect of this prosecution history would be small; in a suit against IMPRA, it is zero.
For all of these reasons, I conclude that IMPRA's catheter infringes independent claims 1 and 19 of the '968 patent, and given this conclusion IMPRA cannot successfully deny that it infringes the dependent claims I mentioned at the outset. I move to the question whether the '968 patent is valid.
From here on IMPRA bears the burden of persuasion, 35 U.S.C. § 282, and by clear and convincing evidence. Mumm v. Decker & Sons, 301 U.S. 168, 171, 81 L. Ed. 983, 57 S. Ct. 675 (1937); Jones v. Hardy, 727 F.2d 1524, 1528 (Fed. Cir. 1984). It is a burden IMPRA has not carried, and I find independent claims 1 and 19 valid. (The validity of the dependent claims has not been separately attacked.)
The first four of IMPRA's arguments are designed to show that Mahurkar waited too long before seeking his utility patents. His first applications sought design patents. Design Serial No. 538,671, filed October 3, 1983, was converted on August 15, 1984, to an application for a utility patent, which issued as the '968 patent. A separate design application, Serial No. 356,081, filed on March 8, 1982, was the parent of the utility application filed on October 1, 1984, that led to the '141 patent. In August 1982 Mahurkar obtained a Canadian design patent on the '081 drawings. This event, more than a year before the conversions of the U.S. design applications to requests for utility patents, means that unless the utility applications are treated as continuations of the design applications, the filings come too late. See 35 U.S.C. §§ 102(b), 120. Earlier published opinions lay out the background of this timing problem, so I turn directly to the three ways in which IMPRA seeks to knock out the use of the design applications. Following that is a fourth timing argument: that Mahurkar's invention was "on sale" more than a year before the filing of design patent application '671, so that the utility application is untimely even if it takes that design application's date. Only after resolving these timing issues do I turn to obviousness, anticipation, and the like. For simplicity, and because I largely avoid questions about the '141 patent, I concentrate on timing questions concerning the '968 patent.
Section 112 of the patent code calls for the application to contain "a written description of the invention, and of the manner and process of making and using it". 35 U.S.C. § 112. The design application did not contain any pertinent words. It just had drawings, leading to IMPRA's contention that it flunks § 112, and that the utility application therefore must be treated as a new application rather than a continuation.
Resolving a tension in its own cases, the Federal Circuit concluded on an earlier appeal that diagrams may satisfy the "written description" requirement of § 112 when they "clearly allow persons of ordinary skill in the art to recognize that [he or she] invented what is claimed." 935 F.2d at 1563, quoting from In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989) (bracketed material added by Vas-Cath opinion). "The test for sufficiency of support in a parent application is whether the disclosure of the application relied upon reasonably conveys to the artisan that the inventor had possession at that time of the later claimed subject matter." 935 F.2d at 1563 (internal quotations and attributions omitted). This approach has been reiterated in later opinions. Wang Electronics, Inc. v. Toshiba Corp., 993 F.2d 858, 865 (Fed. Cir. 1993); Hayes Microcomputer Products, 982 F.2d at 1533. And the panel in Vas-Cath added still another expression of the thought: "the applicant must . . . convey with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention. The invention is, for purposes of the 'written description' inquiry, whatever is now claimed." 935 F.2d at 1563-64 (emphasis in original). Another variation: "The proper test is whether the drawings conveyed with reasonable clarity to those of ordinary skill that Mahurkar had in fact invented the catheter recited in those claims". Id. at 1566.
Because a "specification is directed to one skilled in the art", Hayes Microcomputer Products, 982 F.2d at 1533, I must decide whether such a person would understand the drawings of the design application as showing that Mahurkar was in possession, when he filed the design application, of the features claimed in the utility application. The answer to that question must be "yes." The drawings accompanying the design and utility applications are identical (except for the addition of arrows and numbers to the utility drawings). The utility application simply lays out the details of what the design drawings show--to be precise, the utility claims narrate what features of the drawings are important, without adding anything. I find that Mahurkar was in possession of the whole invention when he filed the design applications, and the drawings in the design application would have enabled a person of ordinary skill in the art to draft the written claims that appeared in the design application.
What the drawings show to a person skilled in the art is a question of fact, on which there was extensive testimony at trial. Mahurkar testified that any fool could see the import of the drawings--they are so clear that even a judge can tell what is going on. Tr. 127-28. In my first published opinion I wrote that Mahurkar plainly had possession of the invention and showed that invention in the drawings"--what Mahurkar eventually patented is exactly what the pictures in [the design applications] show", 745 F. Supp. at 523--but I did not think them legally sufficient.
IMPRA replies that Mahurkar, Ash, and Luther are not persons of ordinary skill in the art. They are persons of extraordinary skill. (Luther, for example, holds more patents on catheter technology than any other person in the world.) Mahurkar must have felt honored to be flattered by his opponent, and to hear a concession that buttresses his position on other aspects of the case by building up his witnesses' credentials. Let us suppose IMPRA is right, that Mahurkar, Ash, and Luther stand head and shoulders above ordinary catheter designers and nephrologists. Still, the leaders of a field understand something about how the median members of the discipline think, and each of the three witnesses testified that not only he but also a "normal" catheter designer could see the correspondence. I credit those statements, too--especially given what happened when IMPRA's expert Smith took the stand. Mahurkar's lawyer took Mr. Smith through exactly the same charts and questions. Could Smith see the correspondence between the design drawings and the claims of the utility patents? Yes, Smith answered, he could, at least for the '141 patent (in which the link between the drawings and the utility claims is harder to establish). For the '968 patent he was silent; IMPRA effectively offered no evidence on the '968 patent to rebut the testimony of Mahurkar, Ash, and Luther, and the inference to be drawn from Examiner Truluck's decision.
In sum, I answer the questions posed by the Federal Circuit with the finding of fact that the design drawings clearly show that Mahurkar possessed the invention claimed in the '968 patent as of the date of the design filing and that the drawings conveyed with reasonable clarity to those of ordinary skill in the art that Mahurkar in fact Invented the catheter recited in the utility claims.
Section 112 also requires an application to "set forth the best mode contemplated by the inventor of carrying out his invention". IMPRA observes that the design applications do not show a catheter with a separately molded tip. To the contrary, they imply that the tube and tip belong to a single piece of plastic. Yet Quinton Instruments Company, Mahurkar's licensee and his confederate in arms in this litigation, makes its catheters in two pieces. The tube is cut at a right angle to its length, while it still has a double-D cross-section, and a separately molded tip is glued on. Figure 5 shows the construction of the Quinton-Mahurkar catheter.
If Quinton, with Mahurkar's blessing, makes the tube and tip out of different pieces (and, it turns out, different materials), does it not follow that the design drawings fail to disclose the best mode?
No, it does not follow. IMPRA's argument depends on the premise that Quinton is today using the best mode contemplated by the inventor in 1982 and 1983, when Mahurkar filed the design applications. Section 112 calls on the inventor to disclose the best mode that he contemplates at the time; it does not impose requirements on licensees and other manufacturers, who make their own decisions at a later time. "A best mode analysis has two components. The first inquiry focuses on whether the inventor knew of a mode of practicing his invention at the time he filed his patent application which he considered to be better than any other. This determination is subjective, focusing on the inventor's state of mind at the time he filed his application. If he did have a best mode, the next question is whether he disclosed it and did so adequately to enable one of ordinary skill in the art to practice the best mode. This is an objective determination. There must be no concealment of a mode known by the inventor to be better than that which he disclosed." Hayes Microcomputer Products, 982 F.2d at 1536 (citations omitted). See also, e.g., Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1575 (Fed. Cir. 1992).
Mahurkar dealt directly with the subjective portion of this test. He testified that when he filed the design applications he believed single-piece molding to be the best way to form the catheter. Separately molded tips can break off, and Mahurkar prefers to avoid that risk. IMPRA, too, sees a separate tip as undesirable and does not use one. I credit Mahurkar's testimony, which means that the drawings disclosed the inventor's preference. As for the objective component: there can be no question that the design drawings adequately disclose single-piece construction of tube and tip. IMPRA's argument starts from the premise that they convey this message to anyone skilled in the art.
By the time Mahurkar sought his patents, Quinton had decided to use a separate tip produced by injection molding. Testimony at trial revealed why. Although Quinton, like Mahurkar, preferred unitary construction, Quinton had trouble finding a vendor that could supply a properly shaped tip molded from the double-D tubing. It tried several suppliers and rejected the products of each. Rather than accept defective catheters, or delay their introduction until it could improve its thermal forming methods, Quinton decided to make the tip separately. To put this differently, the manufacturer compromised on one aspect of the product (the probability of tip separation) to improve other aspects, such as the smoothness of the intake and return ports and the stiffness of the tip. The use of the separate tip helped Quinton to meet another of Mahurkar's specifications, the absence of "dead space" below the intake port that causes clotting. And by getting the product to market faster Quinton produced benefits for persons in need of hemodialysis. Compromises in construction, as in a design itself, are common, and this particular compromise does nothing to undermine the fact that both the design drawings and the utility patent reveal Mahurkar's preference for single-piece construction.
IMPRA believes that the design drawings would not have enabled a person skilled in the art to practice the invention. This is essentially a replay of an argument that failed to persuade the Federal Circuit, and it does not persuade me. Mahurkar, Ash, and Luther testified that the drawings would have enabled a person skilled in the art to make and use the invention, and I accept this testimony.
The current variation of the enabling-disclosure argument is that the drawings in the design applications lack arrows showing the direction in which blood flows. If you can't tell which way the blood is flowing, the argument goes, how can you tell how to connect the catheter to the machine that purifies the blood? Other shadings of this "how can you. . . .?" question are possible, but they assume that the diagrams are addressed to children rather than persons skilled in the art. Any catheter designer, any dialysis technician, any nephrologist, indeed any general practitioner of medicine, would understand that the shorter lumen takes in the blood (or whatever other fluid passes through the catheter) and the longer lumen returns that fluid. Otherwise recirculation would defeat the purpose for which the catheter was being used. Catheters of this kind go into large veins. Blood comes out of the vein "upstream" (through the intake ports in the shorter lumen), is processed, and is returned downstream. If the blood were returned upstream via the shorter lumen, it would be sucked back out as it continued down the vein. Clean blood would be re-cleansed; other blood would be untreated. Anyone with an inkling of what the diagrams depict would understand this in a flash.
Parts II.A, II.B, and II.C of this opinion, taken together, lead me to find that the '968 utility patent application must be deemed to have been filed on October 3, 1983, when the '671 design application was filed. 35 U.S.C. § 120; Racing Strollers, Inc. v. TRI Industries, Inc., 878 F.2d 1418, 1421 (Fed. Cir. 1989); KangaROOS U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571 (Fed. Cir. 1985).
Mahurkar gave Quinton an exclusive license to produce his dual-lumen catheters. One condition on exclusivity was the sale of the first catheter within a year, that is, by September 30, 1982. Paragraph 2.8 of the Quinton-Mahurkar license. As the time approached, Quinton had not made a sale, because it had not been able to make catheters according to Mahurkar's specifications. Vendors could not form the double-D tubing correctly. Quinton could not form a tip out of the tubing it had received or create smooth holes; the list of difficulties was extensive, although similar difficulties accompany the introduction of many novel devices. At all events, Quinton had nothing for sale--at least, not for commercial sale.
Which is not to say that Quinton could not make double-D catheters bearing some of the hallmarks of Mahurkar's designs. Its staff made a few prototypes by hand to test the rates of flow and the pressure changes. Finding them satisfactory, it furnished prototypes to Dr. Carlos Flombaum at the Memorial-Sloan Kettering Cancer Center for tests. Dr. Flombaum performed the tests and reported favorable flow rates but unacceptable flow resistance readings and recirculation rates. Flombaum Dep. 38-39. He also reported that the catheters were of poor construction and recommended that further testing be conducted on dogs. MMDL 176 at 4.
Wayne Quinton, the CEO of Quinton Instruments, decided to sell similar prototypes in order to retain the exclusive license. Being no ghoul, Quinton structured this transaction to ensure that the prototypes would not be implanted in human subjects. He paid a call on Christopher Blagg, the executive director of Northwest Kidney Center and a longstanding acquaintance. Quinton asked Blagg for what Blagg characterized as a personal favor: to buy some of his new catheters. (Blagg testified by deposition, as did most of the other participants in the events of August 1982. The depositions were introduced into evidence at trial.) Blagg called both the visit and the request unusual, but he accommodated Quinton and agreed to buy the devices. Northwest received an invoice for 20 catheters at $ 20 apiece. It did not pay this bill, and it received only two catheters. The minutes of Quinton's Renal Projects Team include this observation: "Shipped two catheters to N.W. Kidney Center August 31, to satisfy marketing requirement." Whether the Kidney Center paid even for the two is unclear; I shall assume it did, although I do not think the answer matters. Mahurkar protested that this was a sham and threatened to terminate Quinton's exclusivity; the parties eventually worked out their differences and Quinton kept its exclusive rights.
The two catheters were never used. They were delivered directly to Dr. Tom Sawyer, chief staff physician of the Center (products usually were delivered to the shipping department), who put them not in the Center's medical stores but in a closed cabinet over a sink, where they remained until patent litigation erupted. It was clear from the outset that they would not be used, and this for two reasons.
First, Northwest Kidney Center's principal business is dialysis of persons with chronic kidney failure. Patients receiving long-term dialysis rarely use catheters of the kind Mahurkar designed. Instead blood is exchanged through a fistula, a knot of tissue arranged as a receptacle for connections to the dialysis machine. Fistulas sometimes fail, or do not form properly, and in these cases chronic dialysis patients need catheters or some alternative means of access. Northwest sends these patients to hospitals for the insertion of the necessary catheters. Northwest was not going to use the catheters Quinton supplied, because it does not install any subclavian catheters. Blagg Dep. 50-51, 61-62.
In finding that use was not contemplated by either Quinton or Northwest, I have not overlooked Blagg's testimony that he did not buy things that he did not plan to use, and that he wanted to put the catheters "into some patients and see how they worked." Blagg Dep. 23. Blagg confessed to substantial difficulties in remembering what had happened in 1982, and one of the things he seems to have forgotten is that the Quinton-Mahurkar catheter is a product of a class that the Northwest Kidney Center did not insert; it sent patients to hospitals for that procedure. Blagg testified that the whole procedure was out of the ordinary--that vendors usually give away samples of new products, but that Wayne Quinton had asked him as a favor to buy these, and that he accommodated his long-time vendor. Blagg Dep. 18-20; Blagg Declaration P 3. That Blagg does not "recall" any restrictions on the use of the devices does not mean that there were none, either by agreement or by practical necessity.
The hand-made devices that Quinton put in Dr. Sawyer's hands were better than the catheters Mahurkar made in his kitchen, and were of approximately the same construction as those that Dr. Flombaum had used with human patients. Accordingly they could have been used as catheters, notwithstanding the many shortcomings in their design that made them unsuitable as commercial products. (I reject Mr. Green's testimony that these devices were merchantable in the trade in 1982; they were prototypes, not saleable devices, and were so crude that Quinton would not even have given them away, except for testing or a desire to retain its exclusive license. Instead I accept the testimony of Dr. Mahurkar and Mr. Harding, and the implication of the depositions of Quinton's staff, that these were not functional as therapeutic catheters.) The catheters were crudely formed, and the holes for the passage of blood were drilled by hand. For one of these catheters the drill slipped, creating a hole in the septum that would lead to recirculation. The edges of the drilled holes were rough, creating a risk of hemolysis (rupture of red blood cells and the release of hemoglobin directly into the blood, with potentially fatal effects), and there were dead spots where blood would stagnate, creating a risk of clotting. They were not radiopaque. The tip was not stiff enough for normal insertion using the Seldinger technique. These flaws prevented commercial sale. Yet they did not make the devices killers, as Mahurkar would have it. Quinton told the FDA, when applying for approval to sell catheters of Mahurkar's design, that the devices it furnished to Northwest Kidney Center were safe. Careful monitoring during hemodialysis would have enabled a physician to remove these catheters if the risks came to pass. A need for full-time monitoring is another reason, however, why these devices could not have been sold commercially: an important objective of the Mahurkar catheter is to permit patients to go weeks or even months at a time without clotting and with only occasional supervision.
What is one to make of these events? Do they show that the Mahurkar invention was "on sale in this country" in August 1982? IMPRA contends that it does, because (1) the devices constitute a "reduction to practice" and would have worked as well as those Dr. Flombaum implanted, and (ii) the transaction was a bona fide sale under the Uniform Commercial Code and not for experimental purposes. Mahurkar replies that the devices were so unsafe that they could not properly be called "catheters," that they do not embody his invention because they lack elements such as axially separated intake and exit ports and a relative concentration of material in the tip, and that the transaction was a sham.
I find that the devices furnished to the Northwest Kidney Center were "catheters" and constituted a reduction to practice of the Mahurkar invention, to the extent it was possible to do this by hand. If IMPRA were to make and sell identical devices today, Mahurkar could contend, successfully, that they infringed claims 1 and 19 of the '968 patent. Although the hand-made devices of August 1982 were far from the polished commercial products of today, they either embodied the invention or came close enough to satisfy the standard of Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834, 836 (Fed. Cir. 1992) (whether the complete invention was "embodied in or obvious in view of the thing sold or offered for sale").
The transaction was a "sale" for purposes of contract law. Northwest Kidney Center got good title to the catheters and was free to do with them what it pleased. If It did not pay, this does not undo the quality of the transaction as a sale; Quinton could have filed suit for the $ 40 price. Yet the transaction was also a sham, from the perspective of the Quinton-Mahurkar license. The pertinent clause of that license was designed to induce Quinton to get the product into commercial sale and use, and Quinton failed in that task. What it furnished to Northwest Kidney Center was not a marketable product, could not have been used in compliance with the package directions, and could not have been used therapeutically even by persons willing to ignore those instructions.
Many years ago the Second Circuit adopted a mechanical rule: any transaction that is a "sale" for purposes of the law of contracts starts the clock under § 102(b), even if the "sale" is a sham or a device to bamboozle the inventor (or one of the inventor's creditors). Mayer v. A & H.G. Mutschler, 248 F. 911, 915-16 (2d Cir. 1918). See also Timely Products Corp. v. Arron, 523 F.2d 288, 302 (2d Cir. 1975). If this were the prevailing law, IMPRA would win. But it is not the law in the Federal Circuit, which has disparaged any mechanical equation between "sale" for the purpose of commercial law and "on sale" for the purpose of § 102(b). See UMC Electronics Co. v. United States, 816 F.2d 647, 654-57 (Fed. Cir. 1987).
UMC Electronics abolished all mechanical tests and substituted an approach under which triers of fact must consider all facts and circumstances in light of the purposes of the patent laws in general and § 102(b) in specific. Until UMC it was widely thought that to determine whether the invention was "on sale," one asked whether the inventor offered or sold an item constituting a "reduction to practice." UMC Electronics holds that reduction to practice not dispositive, although it is a consideration. Other cases wipe away other simple tests. Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 838-39 (Fed. Cir. 1984), holds that whether the item sold is of commercial quality is important but not dispositive. A sale (or offer for sale) may satisfy § 102(b) even though the product is not ready for commercial marketing. But whether the item is merchantable still matters. See Shatterproof Glass Corp. v. Libbey - Owens Ford Co., 758 F.2d 613, 621-23 (Fed. Cir. 1985). I agree with IMPRA that Shatterproof Glass does not embrace every word of the jury instruction that includes "commercially useful" language. The key to that decision was that the apparatus and method were not even "functional" on the bar date. 758 F.2d at 623. Still, Shatterproof Glass implies that the trier of fact must consider the extent to which the product works properly. Cases such as UMC Electronics require the trier of fact to consider all of the circumstances.
What circumstances matter? That depends on the policies § 102(b) serves. According to IMPRA, "the principal policy underlying the 'on sale' bar is to discourage the removal of inventions from the public domain that the public justifiably comes to believe are freely available." Memorandum in Support of IMPRA's Position That No Injunction Should Issue 3 (emphasis in original). If that is indeed the function of the on-sale bar, then Mahurkar wins this case hands down. No member of the public, or even of the trade, would have believed that the Quinton-Mahurkar catheter was "freely available" in August 1982. The circumstances of the transaction show that this was a put-up job, a favor Blagg did for a friend in order to satisfy a licensing condition, without any prospect that the catheters would be used. It was not a sale on ordinary commercial terms. No one else relied, or could have relied, on any belief that the Quinton-Mahurkar catheter would be available on any terms. The language in IMPRA's memorandum is similar to one of the considerations listed in UMC Electronics, in the original version, that language is even less favorable to IMPRA, because the Federal Circuit added after "freely available": "to all as a consequence of prolonged sales activity." 816 F.2d at 652, quoting from General Electric Co. v. United States, 228 Ct. Cl. 192, 654 F.2d 55, 61 (Ct. Cl. 1981) (in banc). Whatever phrases might be used to describe the transaction between Quinton and Northwest Kidney Center, "prolonged sales activity" is not among them.
The Federal Circuit's cases suggest several other roles for § 102(b). UMC Electronics offers two of salience here: preventing the inventor from commercially exploiting his exclusive position before obtaining the patent (in other words, preventing the inventor from increasing by more than one year the effective length of exclusivity), and giving the inventor time to test the commercial market so that he may determine whether it is worth incurring the costs of pursuing a patent. 816 F.2d at 652-53. The latter consideration again counsels against treating the Northwest Kidney Center transaction as putting the catheter "on sale." It was not a means of sticking one's toe into the commercial waters; information about the commercial demand for ...