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PSN ILLINOIS, INC. v. IVOCLAR VIVADENT

October 10, 2005.

PSN ILLINOIS, INC., Plaintiff,
v.
IVOCLAR VIVADENT, INC.; DENTSPLY INTERNATIONAL, INC.; DEN-MAT CORPORATION; MICRO DENTAL LABORATORIES; NATIONAL DENTEX CORPORATION; and KNIGHT DENTAL STUDIO, INC., Defendants. IVOCLAR VIVADENT, INC., Counterclaimant and Third Party Plaintiff, v. PSN ILLINOIS, INC., Counterclaimant-defendant, and GERALD G. McLAUGHLIN, Third-Party Defendant.



The opinion of the court was delivered by: ROBERT GETTLEMAN, District Judge

MEMORANDUM OPINION AND ORDER

On November 9, 2004, plaintiff PSN Illinois, Inc. ("PSN") filed this action alleging infringement of patent number 4,579,530 (`"530 patent"), entitled "Fabrication of Porcelain Restorations." The `530 patent claims methods for making dental porcelain veneers. Plaintiff alleges that the Empress system produced by defendant Ivoclar Vivadent, Inc. ("Ivoclar") infringes the `530 patent, and that the other defendants, dental laboratories, contribute to the infringement by using the Empress system. Ivoclar has filed a motion for summary judgment under Fed.R.Civ.P. 56 on the its defenses of non-infringement and laches.

The issue of infringement is hotly contested. On September 27, 2005, at defendant's helpful suggestion, the court held a hearing to allow the parties to present their respective products and processes. The parties' able demonstrations and explanations were informative and professional, and will aid any necessary claim construction. If defendant establishes that plaintiff's claims are barred by laches, however, there will be no need to adjudicate infringement because the patent has expired. The court therefore bifurcates the issues of laches and infringement, and will hold a bench trial on the issue of laches prior to resolving the question of infringement. FACTS*fn1

  PSN is an Illinois corporation, and the owner of the `530 patent. Ivoclar is a Delaware corporation that manufactures materials used to fabricate porcelain dental veneer restorations, including those sold under the "Empress" trade name. The `530 patent was issued to Dr. Gerald G. McLaughlin ("McLaughlin"), the named inventor, on April 1, 1986. Reexamination Certificate BI 4,579,530 was issued July 11, 1989, which narrowed the scope of the patent claims to porcelain veneers specifically. The `530 patent expired November 21, 2004.

  The process described by the `530 patent is a form of a technique that is commonly known in the industry as a "refractory" technique for creating porcelain dental veneers, which are attached to the surface of a tooth to replace lost tooth structure and/or enhance the aesthetic appearance. The patent describes a method of creating a veneer by brushing a liquid slurry made of porcelain powder and water onto a "statue" or model of a patient's tooth. The porcelain is hardened on the statue and the statue is removed by "croding" by blasting it with glass beads, leaving the veneer. The process used by defendant's Empress products is commonly known in the industry as a "lost wax" or "pressable" technique.

  On April 20, 1993, Dr. George W. Tysowsky ("Tysowsky"), defendant's vice president of research and development, gave a presentation at a conference held by the American Academy of Cosmetic Dentistry ("AACD"). The seminar was entitled, "Presenting IPS Empress: A New Ceramic Technology," and was described in the conference brochure as presenting a "a new ceramic technology and clinical technique associated with the preparation, lab fabrication, and cementation of the IPS Empress restoration." McLaughlin attended at least a portion of Tysowsky's presentation, and later wrote two letters to Tysowsky dated May 11, 1993, and September 4, 1993, stating that he "really enjoyed" the presentation and wanted to include it in an upcoming educational program that he was organizing.

  Defendant asserts that after attending the AACD seminar, McLaughlin knew of defendant's Empress product "in detail." McLaughlin states that he heard Tysowsky discuss an Empress inlay,*fn2 not an Empress veneer. McLaughlin denies that the AACD presentation was detailed, and that it did "not discuss the specific steps that a laboratory performs in fabricating a veneer." Defendant does not deny that Tysowsky did not demonstrate the process of fabricating an Empress porcelain inlay restoration provided to the AACD participants, but rather displayed a pre-fabricate inlay.

  During discovery in the instant case, McLaughlin produced a manual from his records regarding Empress products that defendant claims was mailed to McLaughlin's home in 1994. The manual describes a "new pressed ceramic system" from Ivoclar, and the use of glass ingots. It states, "The base glass is melted, quenched, fried, ground, remelted, and tempered into homogeneous glass ceramic that is pressed into ingots by the manufacturer and refired for construction of restoration veneers."

  For a period of time the `530 patent was held by a company, Yukiyo, Ltd. ("Yukiyo"), of which McLaughlin was president. During the early to mid 1990s, Yukiyo asserted the `530 patent against approximately 27 dental laboratories. Yukiyo did not assert the patent against defendant or its Empress product. The cases were consolidated in In re Yukiyo Patent Lit. in the Northern District of California. The defendants challenged the validity of the patent under 35 U.S.C. ยง 102(b), arguing that the invention was described in a printed publication more than one year prior to the patent application. After the Yukiyo jury found the patent was not invalid, the district court determined it was invalid as a matter of law, but was reversed by the Federal Circuit. Yukiyo, Ltd. v. Watanabe, 1997 WL 327345, unpub. op. (Fed. Cir. 1997). The case was settled in 1999, prior to a second validity adjudication.

  From approximately 1995 through 1997, McLaughlin and defendant engaged in intermittent discussions concerning licensing the `530 patent. McLaughlin traveled to defendant's plant in Buffalo, New York. During this time period, McLaughlin did not accuse the Empress product of infringement. Plaintiff asserts that defendant told McLaughlin on "several occasions that it did not need a license for his patent because its veneer restoration system was based on a completely different technology." McLaughlin testified that in December 1992 and in 1995 defendant told McLaughlin that the Empress system was different from the `530 patent method because Empress used different materials, including "liquid glass," and employed the "lost wax" method. McLaughlin asked defendant for copies of its Empress instructions, but defendant refused to provide them unless McLaughlin purchased an Empress system at a cost of approximately $10,000 to $20,000.

  Plaintiff, McLaughlin's assignee, alleges that McLaughlin first became aware of defendant's infringement in October 2004, a month before the instant law suit was filed, when he visited defendant's website and viewed technical information concerning Empress, including its manual, instructions, and other technical data that McLaughlin states that he had not previously seen. According to McLaughlin, the most significant discovery in October 2004 was that the ingot used by Empress, which defendant had previously said was a liquid glass, "was in fact porcelain powder pressed into the shape of an ingot." Plaintiff argues that deposition testimony of other people in the veneer industry demonstrates that "the veneer industry did not know that the Empress ingot was made of powder." Defendant argues that the information available on its website in 2004 was the same information contained in 1994 Empress manual produced from McLaughlin's files during discovery, and in Tysowsky's presentation to the AACD in 1993.

  SUMMARY JUDGMENT STANDARD

  A movant is entitled to summary judgment under Rule 56 when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Unterreiner v. Volkswagen of America, Inc., 8 F.3d 1206, 1209 (7th Cir. 1993). Once a moving party has met its burden, the nonmoving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. See Fed.R.Civ.P. 56(c); Becker v. Tenenbaum-Hill Associates, Inc., 914 F.2d 107, 110 (7th Cir. 1990). The court considers the record as a whole and draws ...


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