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Medline Industries, Inc. v. C.R. Bard, Inc.

United States District Court, N.D. Illinois, Eastern Division

October 7, 2016

MEDLINE INDUSTRIES, INC., Plaintiff,
v.
C.R. BARD, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          SHARON JOHNSON COLEMAN JUDGE

         The Plaintiff, Medline Industries, Inc., brought this patent infringement action against C.R. Bard, Inc., alleging that Bard infringed its patents - Nos. 8, 746, 452 (“the 452 patent”) and 9, 283, 352 (“the 352 patent”)-protecting the design of a tray for urinary catheters. Bard's answer to Medline's complaint asserted the affirmative defense of inequitable conduct and alleged a counterclaim seeking a declaratory judgment of unenforceability as to the ‘452 patent based on the alleged inequitable conduct. Medline promptly filed a motion to dismiss the counterclaim and to strike the inequitable conduct affirmative defense [28]. For the reasons set forth herein, that motion is granted.

         Background

         The following facts are alleged in the defendant's counterclaim, and are taken as true for the purpose of the present motion. The initial application relevant to this motion was patent application 12/495, 148 (“the 148 application”), which subsequently yielded patent number 8, 631, 935 (“the 935 patent”). The patent examiner issued a restriction requirement, resulting in the severance of claims 1-18 from the 148 application and their refiling as divisional application No. 12/846, 675 (“the 675 application”), which yielded the 452 patent.

         In a December 22, 2011 office action, the Examiner rejected the pending claims in the 675 application as obvious. Medline's attorney, Phillip Burrus, filed a response asserting secondary considerations of non-obviousness. Specifically, the response included articles from Infection Control Today and iStockAnalyst.com which were characterized as evidence of secondary considerations of non-obviousness. The examiner subsequently issued an office action again rejecting all pending claims as obvious. With respect to the articles submitted, the office action noted that “Applicant submits secondary considerations in the arguments; however, this is not a proper affidavit under 37 CFR 1.132” and that the examiner accordingly had not considered that evidence. On March 25, 2013, Burrus filed a response challenging the rejection of the claims as obvious based on the purported secondary considerations of non-obviousness.

         During the prosecution of the 148 application, the examiner similarly rejected all pending claims as obvious. Burrus submitted a response containing an article from Infection Control Today, which was characterized as evidence of secondary considerations of non-obviousness. Burrus subsequently filed a request for continued examination discussing the previously submitted Infection Control Today article and an iStockAnalyst article. Attached to that request was a Medical News Today article with the same content as the iStockAnalyst article and an article published by Morningstar. The examiner issued an office action rejecting the pending claims, again noting that “Applicant submits secondary considerations in arguments; however, this is not a proper affidavit under 37 CFR 1.132.” On April 3, 2013, Burrus filed a response challenging the rejection of the claims as obvious based on the purported secondary considerations of non-obviousness. Both Burrus' March 25 response in the 675 application and his April 3 response in the 148 application asserted that the previously attached articles constituted objective evidence of secondary considerations because they extolled the virtues of the claimed invention and demonstrated an immediate and favorable response. Of particular note, both the March 25, 2013 and April 3, 2013 responses filed by Burrus contained seven pages of identical argument under the heading “Secondary Considerations Demonstrate Applicant's Invention is Non-obvious over Prior Art.”

         That section of the responses addressed three articles, from Infection Control Today, iStockAnalyst, and Morningstar, that Burrus characterized as objective evidence of secondary considerations of non-obviousness. Burrus specifically argued, among other things, that the articles constituted objective evidence of non-obviousness because they illustrated an immediate and favorable response to the invention.

         Burrus contended that the Infection Control Today article, titled “Medical Center Cuts Catheterizations by 21 Percent With Foley Catheter Management System, ” demonstrated that Medline's invention had been used to lead to a 21 percent decrease in catheter-based infections and that this reduction was directly attributable to the design of Medline's tray. Burrus asserted that the iStockAnalyst article, titled “‘Getting to Zero:' Medline's ERASE CAUTI Program Helps Hospitals Reduce Catheter Use by 20 Percent, ” indicated that Medline's invention helped hospitals reduce the cost of catheter procedures and the risk of infections or other complications. Burrus, however, did not file the iStockAnalyst article but instead filed an identical article published a day later in Medical News Today. Finally, Burrus referenced a Morningstar article titled “Floyd Medical Center Reduces Catheter-Associated Urinary Tract Infections 83 Percent and Catheter Use by 23 Percent, ” which Burrus characterized as directly crediting Medline's tray with reducing the incidence of urinary infections.

         In his responses, Burrus stated that these articles “are objective in that they were not written by the inventors or assignee of record, but were written instead by third parties.” Burrus further asserted that the articles “are evidence in that they are not merely ‘conclusory statements, ' but rather articles published in national publications that extoll the virtues of the claimed invention and demonstrate an immediate and favorable response.”

         All three articles, however, are republished Medline press releases. The Infection Control Today article contains the same text as a September 2010 Medline press release titled “Arkansas Methodist Medical Center Cuts Catheterizations by 21 Percent with Innovative Foley Catheter Management System.” The January 2011 Morningstar article is identical to a January 2011 Medline press release of the same title. And the Medical News Today and iStockAnalyst articles are republished copies of an April 2011 Medline press release of the same title. All of these press releases were authored by Medline employees. The defendant alleges, on information and belief, that Burrus knew that these articles were republished Medline press releases. The defendant further alleges that the case studies and white papers described in the press releases were themselves ghost-written by Medline employees.

         Jennifer E. Tomes is listed as an inventor on the ‘935 and ‘452 patents. On the same dates that Burrus filed his responses in the ‘675 and ‘148 applications, Medline filed substantially similar declarations by Tomes in support of those applications. Both declarations quote from the Infection Control Today, iStockAnalyst, and Morningstar articles, as well as an article in the Journal of Healthcare Contracting and a Medline publication. The declarations point to these articles as evincing secondary considerations, especially commercial success and unexpected results. Neither declaration, however, is alleged to assert that the articles are evidence of an immediate and favorable secondary response. The declaration identified these articles as providing evidence of secondary considerations but did not disclose that the articles were Medline press releases. Tomes was Medline's Director of Marketing at the time of her declaration. As such, the defendants allege on information and belief that she was aware of the contents of Medline's press releases and that the articles she had identified were republished press releases.

         The examiner in the ‘148 application entered a final office action on July 31, 2013, holding that the bulk of the claims in that application avoided the prior art of record. The examiner specifically rejected the arguments concerning the unexpected benefits of the invention contained in Tomes' declaration and noted that the ruling was based on the persuasive nature of Medline's arguments on page 22 of its reply (which concerned secondary considerations demonstrating an immediate and favorable response). In a subsequent office action, the examiner withdrew the obviousness rejections of claims 1-13 of the ‘675 Application without comment.

         The defendants contend that, by failing to disclose that the articles were republished press releases, Burrus and Tomes violated their duty of candor and good faith, made material misrepresentations with intent to deceive the PTO, and thereby engaged in inequitable conduct rendering the ‘452 patent unenforceable.

         Legal ...


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