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Marctec, LLC v. Johnson & Johnson

February 23, 2010

MARCTEC, LLC, PLAINTIFF/COUNTERCLAIM DEFENDANT,
v.
JOHNSON & JOHNSON AND CORDIS CORPORATION, DEFENDANTS/COUNTERCLAIM PLAINTIFFS.



The opinion of the court was delivered by: Herndon, Chief Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW FINDING THIS CASE EXCEPTIONAL AND AWARDING DEFENDANTS' REASONABLE ATTORNEYS FEES AND EXPERT FEES

This matter came before the Court on the Motion, pursuant to 35 U.S.C. § 285 and Rule 54 of the Federal Rules of Civil Procedure by defendants Cordis Corporation and Johnson & Johnson (collectively, "Cordis"), to (1) declare this case exceptional and (2) award Cordis its reasonable attorneys fees and expert fees and expenses for defense of this action after a decision granting Cordis summary judgment of noninfringement. D.I. 201. After consideration of that motion and subsequent briefing (D.I. 205, D.I. 215), the Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. On June 15, 2009, this Court granted Cordis's motion for summary judgment of noninfringement with respect to all asserted claims of the patents-in-suit. D.I. 178.

2. On September 24, 2009, final judgment was entered in favor of Cordis and against MarcTec, L.L.C. ("MarcTec") on MarcTec's claims and on Cordis's counterclaims for a declaratory judgment of noninfringement; Cordis's counterclaims for a declaratory judgment of invalidity were dismissed without prejudice. D.I. 222.

3. As the prevailing party, Cordis has moved to have MarcTec's suit declared exceptional under 35 U.S.C. § 285 and to be compensated for its reasonable attorney and expert fees and expenses for the defense of this action. D.I. 201. If the Court determines that this case is exceptional under § 285, while MarcTec certainly disputes such a finding, and further states that any alleged malfeasance in this case does not warrant a $4 million award, it does not specifically dispute the reasonableness of Cordis's attorney fees and expenses in defending this case. Similarly, MarcTec does not dispute the reasonableness of the expert fees and expenses incurred by Cordis. D.I. 205. Thus, the main issue before this Court is whether MarcTec's suit is exceptional under 35 U.S.C. § 285. For the reasons set forth below, the Court finds that it is.

I. The Patents-in-Suit

4. This patent infringement case concerns two patents issued to Dr. Peter Bonutti, U.S. Patent Nos. 7,217,290 and 7,128,753 (the "patents-in-suit") entitled "Surgical Devices Containing a Heat Bondable Material With a Therapeutic Agent" and "Surgical Devices Having a Polymeric Material With a Therapeutic Agent and Methods for Making Same." Dr. Bonutti's company, plaintiff MarcTec, owns these patents.

5. As previously described in this Court's opinion on claim construction, the patents-in-suit share a common specification and concern surgical devices. D.I. 175 at 4. As this Court has stated, the specification "discloses only surgical devices such as hip and knee implants and suture anchors" and does not disclose non-surgical devices such as intraluminal coronary stents. Id. at 8. In addition, "the specification does not discuss or disclose solution casting . . . ." Id. As this Court held, "[h]eat bonding is the only form of bonding taught by the patent." Id. at 22.

6. In 2002 and 2003, Dr. Bonutti filed with the U.S. Patent & Trademark Office ("PTO") the applications that led to the patents-in-suit. These applications claimed priority from Dr. Bonutti's 1990 patent application entitled "Surgical Devices Assembled Using Heat Bondable Materials." D.I. 70, Ex. I.

7. As this Court previously found, during prosecution of the patents-in-suit, the patent examiner "rejected Dr. Bonutti's proposed claims as invalid over U.S. Patent No. 5,102,417 ("the '417 patent"), which issued to Dr. Julio Palmaz . . ., the inventor of the balloon-expandable coronary stent." D.I. 178 at 4; see also D.I. 175 at 9. This Court found that, in response to this rejection "Dr. Bonutti represented to the PTO -- and thus the public -- that his invention did not include intraluminal grafts (i.e, stents), and further, that his invention is directed to devices for use in surgical applications, in contrast to Palmaz's balloon-expandable stent, which is not a surgical device." D.I. 178 at 5; see also D.I. 175 at 9-10.

8. As this Court also found, Dr. Bonutti further distinguished his idea from Dr. Palmaz's '417 patent by telling the PTO that his invention was different "because [it], unlike the device described by Dr. Palmaz, has a material bonded to it by the application of heat." D.I. 178 at 5; see also D.I. 175 at 10. As this Court explained, "[t]here is no heat used to bond the coating of the stent in the '417 patent. Dr. Bonutti relied on this difference to differentiate his invention from Palmaz, and thus, to obtain allowance of his claims." D.I. 175 at 10; see also id. at 11-12. Dr. Bonutti also amended the patent claims to highlight this distinction and to require that the material bonded to the implant "is non-flowable and non-adherent at room temperature and becomes flowable, tacky, and adherent upon the application of heat." Id. at 10-11; see also D.I. 178 at 6. As the Court found, "[t]his amendment made clear that Dr. Bonutti's invention required the application of heat to a heat bondable material to cause that material to transform from one state (non-flowable and non-adherent) to a different state (flowable, tacky and adherent)." D.I. 175 at 11; see also D.I. 178 at 6-7.

II. MarcTec's Complaint

9. As this Court has recognized, the specification and prosecution history make clear that "the patents-in-suit are unrelated to stents," D.I. 175 at 8; see also id. at 4-5, and that "Dr. Bonutti represented to the PTO -- and thus to the public -- that his invention did not include intraluminal grafts (i.e. stents) .." D.I. 178 at 5; see also D.I. 175 at 9-10.

10. Notwithstanding these facts, Dr. Bonutti's company (MarcTec) alleged in this case that Cordis's Cypher stent infringes the patents-in-suit. The Cypher stent is a stent using technology invented by Dr. Palmaz -- the same technology that Dr. Bonutti disclaimed to obtain allowance.

III. MarcTec's Claimed Damages

11. The Cypher stent was launched in the United States in 2003. It has generated billions of dollars in annual sales.

12. In this case, MarcTec sought damages totaling hundreds of millions of dollars. For the period from October 2006 (the date the '753 patent issued) to October 2008 (the date of MarcTec's damages report), it sought damages of $168 million. D.I. 201, Ex. A ¶¶ 5-7; D.I. 187, Ex. 2A. MarcTec sought additional damages on Cypher's sales up to December 2011, when the last of the patents-in-suit expires.

IV. Cypher's Manufacturing Documentation Shows No Heat Bonding

13. As noted above, Dr. Bonutti amended his claims during patent prosecution to make clear that his invention required the application of heat to a heat-bondable material to cause that material to transform from one state (nonflowable and non-adherent) to a different state (flowable, tacky, and adherent). 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. D.I. 187, Ex. 1 (Declaration of Michael J. Timmons) at ¶¶ 9-10, 13, Exs. A, D.

14. By letter dated June 25, 2008, Cordis advised MarcTec that it would move for early summary judgment of noninfringement on the grounds that the Cypher stent does not infringe any of the asserted claims because it is a stent and because its coating is applied at room temperature and does not bond by the application of heat. Id. ¶ 16, Ex. G.

15. On July 18, 2008, Cordis moved for summary judgment of noninfringement on these grounds. D.I. 68.

V. MarcTec's Mischaracterizations of the ...


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